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Skill Variety, Innovation and New Business Formation

Author

Listed:
  • Jolanda Hessels

    (Erasmus University Rotterdam, Panteia/EIM, the Netherlands)

  • Udo Brixy

    (Ludwig-Maximilians University, Munich, Germany)

  • Wim Naudé

    (Maastricht School of Management, Maastricht University, the Netherlands)

  • Thomas Gries

    (University of Paderborn, Germany)

Abstract
We extend Lazear’s theory of skills variety and entrepreneurship in three directions. First, we provide a theoretical framework linking new business creation with an entrepreneur’s skill variety. Second, in this model we allow for both generalists and specialists to possess skill variety. Third, we test our model empirically using data from Germany and the Netherlands. Individuals with more varied work experience seems indeed more likely to successfully start up a new business and being a generalist does not seem to be important in this regard. Finally, we find that innovation positively moderates the relationship between having varied experiences, and being successful in starting up a new business. Our conclusion is that entrepreneurs with more varied work experience are more likely to introduce innovations that have not only technical, but also commercial value. Our findings support the notion that entrepreneurship can be learned.

Suggested Citation

  • Jolanda Hessels & Udo Brixy & Wim Naudé & Thomas Gries, 2014. "Skill Variety, Innovation and New Business Formation," Tinbergen Institute Discussion Papers 14-011/VII, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20140011
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Naudé, Wim, 2017. "Entrepreneurship, Education and the Fourth Industrial Revolution in Africa," IZA Discussion Papers 10855, Institute of Labor Economics (IZA).
    2. Daniel Lechmann & Claus Schnabel, 2014. "Are the self-employed really jacks-of-all-trades? Testing the assumptions and implications of Lazear’s theory of entrepreneurship with German data," Small Business Economics, Springer, vol. 42(1), pages 59-76, January.
    3. Mahé, Clothilde, 2016. "Skills and entrepreneurship: Are return migrants 'Jacks-of-all-trades'?," MERIT Working Papers 2016-071, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Michael Stuetzer & Martin Obschonka & Eva Schmitt-Rodermund, 2013. "Balanced skills among nascent entrepreneurs," Small Business Economics, Springer, vol. 41(1), pages 93-114, June.
    5. Werner, Arndt, 2011. "Abbruch und Aufschub von Gründungsvorhaben: Eine empirische Analyse mit den Daten des Gründerpanels des IfM Bonn," IfM-Materialien 209, Institut für Mittelstandsforschung (IfM) Bonn.
    6. Rosendahl Huber, Laura & Sloof, Randolph & van Praag, Mirjam C., 2014. "Jacks-of-All-Trades? The Effect of Balanced Skills on Team Performance," IZA Discussion Papers 8237, Institute of Labor Economics (IZA).
    7. Krieger, Alexander & Block, Joern & Stuetzer, Michael, 2018. "Skill variety in entrepreneurship: A literature review and research directions," MPRA Paper 88389, University Library of Munich, Germany.
    8. Li-Wei Chen & Peter Thompson, 2016. "Skill Balance and Entrepreneurship Evidence from Online Career Histories," Entrepreneurship Theory and Practice, , vol. 40(2), pages 289-305, March.
    9. Mahe, Clotilde, 2017. "Occupational choice of return migrants: Is there a 'Jack-of-all-trades' effect?," MERIT Working Papers 2017-039, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Pankaj C. Patel & Yoav Ganzach, 2019. "Returns to balance in cognitive skills for the self-employed: evidence from 18 countries," Small Business Economics, Springer, vol. 52(1), pages 89-109, January.

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    More about this item

    Keywords

    entrepreneurship; start-ups; human capital; innovation; skills;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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