Working Paper: NBER ID: w24198
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 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 propose that “dinner table human capital”, where children obtain industry knowledge through their parents, is an important factor behind them.
Keywords: Entrepreneurship; Human Capital; Family Influence
JEL Codes: G31; J24; L26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Dinner table human capital (J24) | Entrepreneurship (M13) |
| Exposure to an industry during upbringing (L69) | Entrepreneurial success (L26) |
| Father's industry employment (L69) | Industry choice of entrepreneurs (L26) |
| IQ (C43) | Likelihood of following father's industry (J19) |
| Following father's industry (L69) | Success of ventures (M13) |
| Father's death (J12) | Ruling out direct parental assistance (C90) |