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Skill Variety, Innovation and New Business Formation

Jolanda Hessels (), Udo Brixy (), Wim Naudé and Thomas Gries
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Jolanda Hessels: Erasmus University Rotterdam

No 7889, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We extend Lazear's theory of skills variety and entrepreneurship in three directions. First, we provide a theoretical framework linking new business creation with an entrepreneur's skill variety. Second, in this model we allow for both generalists and specialists to possess skill variety. Third, we test our model empirically using data from Germany and the Netherlands. Individuals with more varied work experience seems indeed more likely to successfully start up a new business and that being a generalist does not seem to be important in this regard. Finally, we find that innovation positively moderates the relationship between having varied experiences, and being successful in starting up a new business. Our conclusion is that entrepreneurs with more varied work experience are more likely to introduce innovations that have not only technical, but also commercial value. Our findings support the notion that entrepreneurship can be learned.

Keywords: entrepreneurship; start-ups; human capital; innovation; skills (search for similar items in EconPapers)
JEL-codes: J24 L26 M13 O31 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2014-01
New Economics Papers: this item is included in nep-cse, nep-ent, nep-ino, nep-knm, nep-lma, nep-sbm and nep-tid
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Working Paper: Skill Variety, Innovation and New Business Formation (2014) Downloads
Working Paper: Skill Variety, Innovation and New Business Formation (2014) Downloads
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