Dinner Table Human Capital and Entrepreneurship
Working Paper 24198
DOI 10.3386/w24198
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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.
Non-Technical Summaries
- An analysis of data on Norwegian entrepreneurs finds that many went into the industries in which their fathers worked and that they...