Entrepreneur Death and Startup Performance*

The knowledge spillover theory of entrepreneurship

Sascha Becker and Hans Hvide

Review of Finance, 2022, vol. 26, issue 1, 163-185

Abstract: How large is entrepreneurs’ personal importance to startups? We use the death of nearly 1,500 entrepreneurs as a source of exogenous variation, and find large and sustained negative effects on growth and profitability. For small startups, the effects go mainly via firm survival, while for larger startups the effects are mainly on firm growth. For larger startups, the mean effect on sales is about 60%. The effects appear to be driven by entrepreneur specialness rather than leadership transition; the effects of death of entrepreneur managers are economically and statistically stronger than the death of managers that are not entrepreneurs.

Keywords: Credit constraints; Entrepreneurship; Firm performance (search for similar items in EconPapers)
JEL-codes: D21 D24 G39 J23 L11 L25 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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