Working Paper: CEPR ID: DP12608
Authors: Hans K. Hvide; Paul Oyer
Abstract: We document three new facts about entrepreneurship. First, a majority of male entrepreneurs start a firm in the same or a closely related industry as their fathers’ industry of employment. Second, this tendency is correlated with intelligence: higher-IQ entrepreneurs are less likely to follow their fathers.Third, an entrepreneur that starts a firm in the same 5-digit industry as where his father was employed tends to outperform entrepreneurs in the same industry whose fathers did not work in that industry. We consider various explanations for these facts and conclude that “dinner table human capital”, where children obtain industry knowledge through their parents, is an important factor behind what type of firm is started and how well it performs.
Keywords: Entrepreneurship; Human Capital; IQ
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Parental industry affiliation (L82) | Entrepreneurial choice (L26) |
| Intelligence (D83) | Parental industry affiliation (L82) |
| Parental industry affiliation (L82) | Startup performance (M13) |
| Intelligence (D83) | Startup performance (M13) |
| Parental industry knowledge (L82) | Startup performance (M13) |