Entrepreneurs' human capital and the start-up size,of new technology-based firms

This paper investigates the determinants of the start-up size of new technology-based firms. While previous empirical studies generally focussed on industry-specific variables, we draw attention to the characteristics of founders, notably their human capital. In the empirical section, we consider a sample of 391 young Italian firms operating in high-tech industries in both manufacturing and services. The econometric estimates confirm the explanatory power of the industry-specific effects highlighted by previous work. In addition, they indicate that the human capital of founders figures prominently in explaining the firms' start-up size. Furthermore, the specific component of human capital associated with industry-specific professional knowledge and managerial and entrepreneurial experiences is found to have a greater positive impact on the initial firm size than the generic component, proxied by education and general (i.e., non-industry-specific) working experience. (C) 2004 Elsevier B.V. All rights reserved.