The Impact of the Entrepreneur's Educational Level on the Employment Creation by New Small and Medium Enterprises

This chapter examines the effects of different types of start-up rates on subsequent employment change. Longitudinal data on start-ups and employment in Portuguese regions in the period 1996–2007 is used for the analysis. The study addresses whether diverse types of new small- and medium-sized enterprise formation have heterogeneous effects on regional employment generation. It is found that, for the range considered, the seven types of start-ups led to significant and negative effects on the average variation of regional employment. It is also observed that these effects were more negative for start-ups with at least one business owner with higher education in engineering and for start-ups with at least one business owner with higher education in management. The last conclusion is that the share of highly skilled employees has a statistically significant and positive impact on the average employment change and, therefore, on regional development.