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Human capital and SME growth: the mediating role of reasons to start a business

Aliaa El Shoubaki (), Issam Laguir () and Matthijs den Besten ()
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Aliaa El Shoubaki: Montpellier Business School
Issam Laguir: Montpellier Business School
Matthijs den Besten: Montpellier Business School

Small Business Economics, 2020, vol. 54, issue 4, No 10, 1107-1121

Abstract: Abstract Human capital has been amply discussed in the literature as a crucial factor for the growth of small and medium-sized enterprises (SMEs). However, the factors mediating the relationship between human capital and small business growth are rarely addressed. Based on the logics of the interlock between abilities, intent and effort, and goals; mediation models; and data from 46,412 French small businesses, we find evidence that reasons to start a business mediate the relation between firm growth and SME owner-managers’ human capital (discriminating between specific and general human capital). The mediation effect is particularly important in the case of general human capital. The obvious and important implication is that without a proper assessment of the reasons to start a business, the dimensions of human capital cannot be used to their full potential to understand firm growth.

Keywords: SMEs; Firm growth; Reasons to start a business; Mediation; L26; L25; M13; M20 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s11187-018-0129-y

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Handle: RePEc:kap:sbusec:v:54:y:2020:i:4:d:10.1007_s11187-018-0129-y