۱- Introduction

۲- Previous Reviews

۳- Theoretical Considerations

۴- Method

۵- Results

۶- Discussion and Conclusion

References

Abstract

This paper provides a systematic review of studies on the effects of human capital interventions on entrepreneurial performance in industrialized countries. We identify 21 experimental and quasi-experimental studies published before September 2018. These studies examine the effects of business training, formal education, and entrepreneurship education. Their performance outcomes include firm profits, firm size, and entrepreneurial earnings. The main finding across these studies is that these interventions do not have statistically significant effects. Formal education is the only exception, showing positive effects on firm profits and entrepreneurial earnings, yet these effects are small in magnitude. Evidence is inconclusive regarding effect duration. These findings stand in stark contrast to correlational studies, which tend to find large positive correlations between human capital interventions and entrepreneurial performance. We therefore conclude that correlational studies tend to overestimate the benefits of human capital interventions. Moreover, our estimates show that the interventions are associated with moderately low additionality.

Introduction

In many countries, entrepreneurship is promoted and encouraged. Examples of programs include the Entrepreneurship Action Plan in the European Union (European Commission, 2013), publicly subsidized micro-enterprise programs in the United States (Schreiner, 1999), and loan schemes for start-up and scaleup companies in several industrialized countries (Young, 2012; Durufle´ et al., 2017). These programs aim at creating new jobs (Folster, 2000; Thurik ¨ et al., 2008), reducing welfare dependence (Michaelides and Benus, 2012), and helping to diffuse innovation (Shane and Venkataraman, 2000; Bhide, 2005) ´ through entrepreneurship. Human capital investments form an integral part of programs targeted at entrepreneurs. By investing in human capital, entrepreneurs may be better able to identify business opportunities (DeTienne and Chandler, 2004), apply innovative practices (McGuirk et al., 2015), deal with uncertainty and regulatory issues (Henry et al., 2005), and adapt to stakeholders’ demands (Gibb, 1997). Accordingly, it is commonly believed that human capital investment enhances entrepreneurial outcomes. Despite increased scientific attention to the effects of human capital investment on entrepreneurial performance, existing evidence is inconclusive. This is because the relationship between human capital and entrepreneurship is not straightforward. Personal characteristics and other factors, which are often unobservable, can affect both the decision to invest in human capital and entrepreneurial performance (Shane, 2006). Failing to take these into account may bias estimations, and hence flaw policy recommendations. Causal studies that address unobserved heterogeneity in the relationship between human capital investments and entrepreneurial performance are therefore of great importance.