The Imprinting of Founders’ Human Capital on Entrepreneurial Venture Growth: Evidence from New Technology-Based Firms

Abstract

This paper tests the presence of an imprinting of founders' human capital on entrepreneurial ventures' performance. More specifically, we empirically explore the impact of entrepreneurs' human capital on a firm's sales growth performance by disentangling the effect of the stock of human capital possessed at foundation from the potential injections and losses of human capital due to exit of founders and/or addition of new owner-managers in the entrepreneurial team over time. Our analysis is based on a panel dataset composed of 338 Italian new technology-based firms (NTBFs) observed from 1995 (or since their foundation) to 2008 (or until their exit from the dataset). We consider the effects of several dimensions of entrepreneurial human capital on firm sales growth and estimate Gibrat law-type dynamic panel data models using OLS estimator and GMM-system estimator to control for endogeneity. Overall, our results point to a positive and significant presence of an imprinting exerted by founders' specific work experience on venture growth which is robust to a series of controls.