Employees’ Entrepreneurial Human Capital and Firm Performance

Pontus Braunerhjelm, Emma Lappi

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We introduce a new measure of human capital, defined as employees' former involvement in entrepreneurship. Such entrepreneurial human capital (EHC) complements traditional human capital measures accumulated through work experience and education. Using detailed longitudinal register data, we track the previous years of entrepreneurial experience for the population of employees in Swedish private sector firms. We provide evidence that higher EHC among employees is associated with significantly higher levels of firm productivity. The baseline result implies that a 10 % increase in employees being former entrepreneurs increases firm-level productivity by 3.9 %. Additionally, we provide evidence that heterogeneity in employees' previous entrepreneurial experience (e.g., the reason for entering and exiting entrepreneurship, type of venture, length of entrepreneurial experiences, and relatedness of technology) influences the impact of EHC on productivity. The results are shown to be robust to various estimation techniques, alternative definitions of EHC, and other performance measures.
Original languageEnglish
Article number104703
JournalResearch Policy
Issue number2
Number of pages17
Publication statusPublished - Mar 2023


  • Human capital
  • Entrepreneurial experience
  • Productivity
  • Innovation

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