Author: Bram Timmermans

UPDATE (March 2009): Awarded the Best Paper Award at the IECER 2009 in Portugal

UPDATE (June 2009): Submitted the paper to the Journal of Business Venturing

The resources an entrepreneur has at its disposal are crucial for the successful exploration and exploitation of an entrepreneurial opportunity.  Within the literature these resources are categorized in three elements, i.e. human capital, financial capital and social capital. The recognition that social capital is one of these resource implies that entrepreneurial activity is more a collective than an individual activity.
Despite the prevalence of entrepreneurship as a collective activity there is predominantly a focus on the founder or founding team. However, this focus fails to recognize the important role that other employees in the new venture may play. The availability of potential employees already influences the number of start-ups and it can be assumed that the resources of these employees have a crucial impact, especially in the infancy phase. There have been studies looking at the recruitment behaviour of entrepreneurial firms where some argue on the important positions that former co-workers occupy in these new ventures. Studies analyzing the effect of recruiting these former co-workers are scarce.  This paper will, by using a linked employer-employee dataset, analyze the effect of internal tiesbased on shared  co-worker experience.The main question that will be asked in this paper is: What is the effect of shared previous co-worker experience on the survival of new firms?
The dataset used for this analysis is the Danish Integrated Database for Labor Market Research (IDA). IDA is suitable for the analysis as its longitudinal characteristic shows firm dynamics and the employment history of all Danish citizens. It is possible to see which individual worked together for any given year since 1980, which facilitate the identification of shared co-worker experience. From this dataset I selected those firms that were established in 2000, which results in a total sample of 3,141 newly established firms.