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  4. HOW FOUNDER HUMAN CAPITAL AND FOUNDING CONDITIONS SHAPE NEW FIRM PERFORMANCE: A STUDY OF NECESSITY ENTREPRENEURSHIP DURING TIMES OF ECONOMIC CRISIS
 
research article

HOW FOUNDER HUMAN CAPITAL AND FOUNDING CONDITIONS SHAPE NEW FIRM PERFORMANCE: A STUDY OF NECESSITY ENTREPRENEURSHIP DURING TIMES OF ECONOMIC CRISIS

Gruber, Marc  
•
Dencker, John C.
•
Nikiforou, Argyro (iro)
April 1, 2024
Academy Of Management Journal

Economic crises have profound effects on societies, motivating many individuals to launch their own firms in order to make a living. Although these firms created "out of necessity" possess few resources besides their founder's human capital, the role that this critical endowment plays in establishing a successful firm during a crisis is unclear, as existing knowledge offers diverging predictions about the value of general and specific human capital. We argue that this debate remains unresolved because we lack a holistic understanding of how each human capital type influences performance when founding conditions vary, and aim to reconcile the contrasting claims by considering how "hard" a crisis hits a given industry. Analyzing data collected from 500 founders who created firms in Greece during the Great Recession, combined with data from the Greek Statistical Office, we find that general human capital provides the greatest benefits, on average, during a crisis; yet specific human capital is more valuable in both the most favorable and the most unfavorable industry contexts. These results reveal how the value of human capital in entrepreneurship is contingent on founding conditions, and call into question existing notions of what it means to be resilient in a crisis.

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Type
research article
DOI
10.5465/amj.2022.0405
Web of Science ID

WOS:001215201400004

Author(s)
Gruber, Marc  
Dencker, John C.
Nikiforou, Argyro (iro)
Date Issued

2024-04-01

Publisher

Briarcliff Manor

Published in
Academy Of Management Journal
Volume

67

Issue

2

Start page

382

End page

406

Subjects

Business

•

Industry

•

Strategy

•

Survival

•

Growth

•

Liabilities

•

Innovation

•

Creation

•

Newness

Editorial or Peer reviewed

REVIEWED

Written at

EPFL

EPFL units
ENTC  
Available on Infoscience
May 16, 2024
Use this identifier to reference this record
https://infoscience.epfl.ch/handle/20.500.14299/208003
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