TY - JOUR
T1 - Understanding the size and profitability of firms
T2 - The role of a biological factor
AU - Guiso, Luigi
AU - Rustichini, Aldo
N1 - Publisher Copyright:
© 2017 University of Venice
PY - 2018/3
Y1 - 2018/3
N2 - In a large sample of entrepreneurs, 2D:4D (second-to-fourth digit) ratio and managerial performance are studied. Entrepreneurs with lower ratio manage larger firms, manage larger firms when acquire control and experience faster average growth. Firms run by high prenatal testosterone entrepreneurs have lower profitability as measured by return on assets and return on sales. Prenatal testosterone is correlated with elicited measures of entrepreneurial skills, like work effort and optimism and the latter are correlated with firm size. This evidence suggests entrepreneurial ability has a biological component and is consistent with models of the size distribution of firms based on entrepreneurial ability.
AB - In a large sample of entrepreneurs, 2D:4D (second-to-fourth digit) ratio and managerial performance are studied. Entrepreneurs with lower ratio manage larger firms, manage larger firms when acquire control and experience faster average growth. Firms run by high prenatal testosterone entrepreneurs have lower profitability as measured by return on assets and return on sales. Prenatal testosterone is correlated with elicited measures of entrepreneurial skills, like work effort and optimism and the latter are correlated with firm size. This evidence suggests entrepreneurial ability has a biological component and is consistent with models of the size distribution of firms based on entrepreneurial ability.
KW - Digit ratio
KW - Entrepreneurial success
KW - Firm size distribution
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U2 - 10.1016/j.rie.2017.04.006
DO - 10.1016/j.rie.2017.04.006
M3 - Article
AN - SCOPUS:85020386792
SN - 1090-9443
VL - 72
SP - 65
EP - 85
JO - Research in Economics
JF - Research in Economics
IS - 1
ER -