Human capital and labor: the effect of entrepreneur characteristics on venture success

Abstract

PurposeThe purpose of this paper is to offer a unique perspective on the role of entrepreneurs’ hard work for the relationship between entrepreneur human capital and venture success. To this end, this study examined whether entrepreneurs with high human capital work harder than entrepreneurs with low human capital, the effect of entrepreneurs’ hard work on venture performance, and whether entrepreneurs’ hard work mediates the relationship between entrepreneur human capital and venture performance.Design/methodology/approachIn this explorative study, the role of entrepreneurs’ hard work as a mediator that transfers entrepreneur human capital into venture success was examined in a sample of 2,648 single-founder startups in the USA and 21,184 observations during the period of 2004-2011.FindingsThe effect of entrepreneurs’ industry experience on entrepreneurs’ hard work was significantly positive, while the effect of entrepreneurs’ general education on entrepreneurs’ hard work was significantly negative. Moreover, entrepreneurs’ hard work was a significant predictor of venture success. Finally, the results showed that entrepreneurs’ hard work partially mediates the positive relationship between entrepreneurs’ industry experience and venture success.Originality/valueOn one hand, the link between human capital and firm performance has been studied thoroughly and findings so far support the positive link between them. On the other hand, there has been continuous criticism that human capital gained much of its attention at the expense of human labor. There is a paucity of research, however, that investigating the dynamics of the relationships between human capital and human labor. This study provides an empirical explanation of such dynamics of the relationships of human characteristics in the context of entrepreneurship.