Matching of individuals for start-ups : a test of the O-ring theory

Müller, Bettina

Vorschau

PDF
dp08112.pdf - Veröffentlichte Version
Download (364kB)

URL:	http://ub-madoc.bib.uni-mannheim.de/2226
URN:	urn:nbn:de:bsz:180-madoc-22263
Dokumenttyp:	Arbeitspapier
Erscheinungsjahr:	2008
Titel einer Zeitschrift oder einer Reihe:	None
Sprache der Veröffentlichung:	Englisch
Einrichtung:	Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC-Schriftenreihe:	Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Fachgebiet:	330 Wirtschaft
Fachklassifikation:	JEL: D23 L26 M13 ,
Normierte Schlagwörter (SWD):	Dänemark , Unternehmensgründung , Gruppenarbeit , Matching , Qualifikation , Einlage
Freie Schlagwörter (Englisch):	Entrepreneurship , O-Ring Theory , Theory Test
Abstract:	In this paper I analyse how individuals match for for the purpose of setting up a new firm. As a theoretical basis I use the O-ring theory introduced by Kremer (1993) and applied to new firms by Fabel (2004). The O-ring theory predicts that individuals segregate between firms according to their level of ability. Further, the theory implies that a higher average ability level within firms is positively related to both the number of individuals and capital per head. Using a rich employer-employee data set on the whole population of Danish firms founded in 1998 most of the predictions of the O-ring theory are rejected. I find that individuals do not match with individuals with the same level of ability. Furthermore, ability and firm size turn out to be negatively correlated. There is only some support for the hypothesis concerning the positive relationship between ability and capital per head.