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| Author: | Backes-Gellner, U. Werner, A. |
| Title: | Entrepreneurial signaling via education: A success factor in innovative start-ups |
| Journal: | Small business economics
2007 : JUN/AUG, VOL. 29:1-2, p. 173-190 |
| Index terms: | education entrepreneurship Germany innovation new enterprise signaling |
| Language: | eng |
| Abstract: | Innovative start-ups and their rspective market partners are confronted with problems of asymmetric information seeing that they don't have any prior production history or reputation. This article examines the meaning of entrepreneurial signaling via education, and whether it can help innovative entrepreneurs communicate their abilities to banks and prospective employees. The entrepreneurs' signaling is argued and expected to be based on certain aspects of their educational history: the potential employees take into consideration entrepreneur's university degree, while the banks, deciding whether to give credit or not, use more precise indicator. The traditional start-ups do not face the problem of asymmetric information and therefore same type of signaling requirement is not expected from them. The hypotheses are tested using data from German start-ups collected 1998/99. |
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