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Does Founders' Human Capital Matter for Innovation? Evidence from Japanese Start-ups


  • Masatoshi Kato,

    Corresponding author
    • Address correspondence to: Masatoshi Kato, Kwansei Gakuin University, 1-155 Uegahara Ichiban-cho, Nishinomiya, Hyogo 662-8501, Japan. E-mail:

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    • Masatoshi Kato is an associate professor at School of Economics, Kwansei Gakuin University, and a visiting scholar at Center for Japanese Studies, University of California, Berkeley.
  • Hiroyuki Okamuro,

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    • Hiroyuki Okamuro is a professor at Graduate School of Economics, Hitotsubashi University.
  • Yuji Honjo

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    • Yuji Honjo is a professor at Faculty of Commerce, Chuo University.

  • This study is financially supported by the Grant-in-Aid for Scientific Research (A) (No. 20243018) of the Japan Society for the Promotion of Science. We are grateful to a number of discussants and participants at seminars and conferences for their comments on an earlier version of this paper. In particular, we thank Y. Akashi, N. Doi, S. Nagaoka, J. O'Connor, and H. Odagiri for their helpful suggestions. We also thank two anonymous referees for their useful comments. Excellent research assistance by K. Ikeuchi is greatly appreciated. Needless to say, any remaining errors are our own.


Using an original questionnaire survey, this paper explores whether and how founders' human capital affects the innovation outcomes of start-ups. We found that founders with greater human capital are more likely to yield innovation outcomes. Because certain types of human capital may boost research and development (R&D) investment, which possibly results in innovation outcomes, we estimate the determinants of innovation outcomes by an instrumental variable probit model. Our findings suggest that specific human capital for innovation, such as prior innovation experience, is directly associated with innovation outcomes, whereas generic human capital, such as educational background, indirectly affects innovation outcomes through R&D investment.