The Impact of Human Capital on Entrepreneurship Quality and Quantity at the Aggregate Level

Based on human capital theory and entrepreneurship literature, we propose that a country’s capital profiles including education level, industry experience, entrepreneurial experience, and immigration experience are positively related to its entrepreneurship quality. On the contrary, we hypothesize that these four dimensions are negatively associated with the quantity of entrepreneurship. These hypotheses are empirically examined on a sample of 86 countries obtained from Global Entrepreneurship Monitor (GEM) and 1,858,444 participants in a 10-year period, from 2007 to 2016. We utilize the Generalized Estimating Equations (GEEs) for the main hypothesis testing and the Random Effects Model for robustness analysis. The findings support most of the hypotheses. We then discuss theoretical implications drawn from the study and provide suggestions for policy makers. Our paper emphasizes that the investment in human capital may not simultaneously result in both high entrepreneurship quality and high entrepreneurship quantity at the aggregate level.