Journal of Evolutionary Economics

, Volume 25, Issue 5, pp 925–957 | Cite as

Entrepreneurial human capital and the survival of new firms in high- and low-tech sectors

  • Masatoshi KatoEmail author
  • Yuji Honjo
Regular Article


This paper explores the role of entrepreneurial human capital in the post-entry performance of firms in high- and low-tech sectors. Using a dataset from the Japanese manufacturing industry, we examine the determinants of new-firm survival, taking into account exit routes to differentiate ‘failure’ (bankruptcy) and ‘nonfailure’ (voluntary liquidation and merger) outcomes. Our results show that entrepreneurial human capital, measured as educational background, is important in reducing the probability of bankruptcy in high-tech sectors, although it does not help significantly in this regard in low-tech sectors. By contrast, we provide evidence that entrepreneurs with high levels of human capital are more likely to voluntarily close businesses both in high- and low-tech sectors. Furthermore, we find that firms managed by entrepreneurs with high levels of human capital are more likely to exit via merger than others, particularly in high-tech sectors. We provide evidence that entrepreneurs with scientific backgrounds are less likely to voluntarily exit than those with humanistic backgrounds, particularly in low-tech sectors.


New firm Entrepreneurial human capital Survival Exit High-tech Low-tech 

JEL Classification

M13 L26 J24 G33 G34 



We extend our thanks for comments from Alex Coad, Kim Huynh, Francine Lafontaine, Jose Mata, Jose Maria Millan, Masayuki Morikawa, Sadao Nagaoka, Hiroyuki Odagiri, Hiroyuki Okamuro, and the participants in seminars at Hitotsubashi University, Erasmus University Rotterdam, the University of Groningen, and the University of Frankfurt, and in the EARIE Annual Conference (Istanbul), the JEA Autumn Meeting (Hyogo), the CAED Conference (London), the RENT Annual Conference (Maastricht), the Competition Policy Research Center Conference (Tokyo), and the Japan Productivity Center Workshop (Tokyo). We also thank the editors (Uwe Cantner and Roberto Fontana) and two anonymous referees for their useful comments. Financial supports from Kwansei Gakuin University Special Grant for Individual Research (A) for the first author and Grant-in-Aid for Scientific Research (B) (No. 26285060) for the first and second authors are gratefully acknowledged. Needless to say, any remaining errors are our own.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.School of EconomicsKwansei Gakuin UniversityHyogoJapan
  2. 2.Faculty of CommerceChuo UniversityTokyoJapan

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