Finding the Roots of Entrepreneurship at the Dinner Table
An analysis of data on Norwegian entrepreneurs finds that many went into the industries in which their fathers worked and that they were more successful than those who entered other industries.
What impact does industry knowledge passed on by a father have on a son's entrepreneurial success? In Dinner Table Human Capital and Entrepreneurship (NBER Working Paper No. 24198) Hans K. Hvide and Paul Oyer tease out specific benefits of exposure to industry knowledge over the course of childhood, as opposed to exposures that result from a father's later introduction to industry connections. They call this passed-on knowledge "dinner table human capital."
How Large Are the U.S. Economy's Gains from Trade?
Norway, where the law requires public disclosure of incomes, was an ideal setting for the study, because income is a useful, if simple, indicator of individual economic success. For business data, the researchers drew on annual financial statements submitted to tax authorities. The data include variables like 5-digit industry code, sales, assets, number of employees, and profits for 1999-2011. They also collected data from Statistics Norway on workplace, education level, gender, income, wealth, marital status, and other variables; IQ test scores were obtained from Norwegian military records for 1984-2005. Finally, to obtain information on start-ups, they analyzed and coded information from the founding documents firms submit to the Brønnøysundregistrene, a Norwegian government agency. These documents include start-up year, total capitalization, and the personal identification number and ownership share of all initial owners with at least a 10 percent ownership stake.
— Jen Deaderick
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