Business Owners, Employees and Firm Performance

Mika Maliranta and Satu Nurmi

No 42, ETLA Working Papers from The Research Institute of the Finnish Economy

Abstract: 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.

Keywords: Entrepreneurship; ownership; firm performance; human capital; diffusion of knowledge (search for similar items in EconPapers)
JEL-codes: J24 J62 L25 L26 O33 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2016-10-06
New Economics Papers: this item is included in nep-bec, nep-eff, nep-ent, nep-hrm, nep-lma and nep-sbm
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Journal Article: Business owners, employees, and firm performance (2019)
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