Business Owners, Employees and Firm Performance

Maliranta MikaNurmi Satu

Abstract
The novel Finnish Longitudinal OWNer-Employer-Employee (FLOWN) database was used to analyze how the characteristics of owners and employees relate to firm performance as determined by labor productivity, survival and employment growth. Focusing on the role of the owner’s formal education and previous experience as an employee, the results show that previous experience in a high-productivity firm strongly predicts high productivity and probability of survival for the entrepreneur’s new firm. This can be interpreted as evidence of knowledge spillover through labor mobility. Strikingly, firms established in times of intensive excess job reallocation were found to exhibit superior productivity performance in the later phases of their life cycles.

Publication info

Part of researches
Labour mobility as a mechanism of spillovers and creative destruction [Completed]
Part of programs
Series
ETLA Working Papers 42
Date
06.10.2016
Keywords
Entrepreneurship, ownership, firm performance, human capital, diffusion of knowledge
ISSN
2323-2420, 2323-2439
Jel
L25, L26, J24, J62, O33
Pages
35
Price
15 €
Availability of print version
Available
Language
English