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Using a sample from an original questionnaire survey in Japan, this paper explores whether and how founders’ human capital affects innovation outcomes by start-ups. The results provide evidence that founders with greater human capital are more likely to yield innovation outcome. However, because certain types of founders’ human capital may boost R&D investment, which possibly results in innovation outcomes, we estimate the determinants of innovation outcomes by an instrumental variable probit model taking into account the endogeneity of R&D investment. Our findings suggest that specific human capital for innovation, such as founders’ prior innovation experience, is directly associated with innovation outcomes after start-up, while generic human capital, such as founders’ educational background, indirectly affects innovation outcomes through R&D investment.

This paper explores research and development (R&D) financing of start-up firms. Using a sample from an original survey conducted in 2008, we identify whether initial funds and founder-specific characteristics relate to R&D investment of start-up firms in Japan. It is found that internal finance is positively associated with R&D investment. It is also found that founders with higher educational background, prior innovation output and academic affiliation tend to raise more funds for R&D. On the other hand, we provide evidence that the effects of founders' human capital are mediated by investment opportunities, which would indicate that R&D investment of start-up firms depends heavily on investment opportunities.

This paper explores the determinants of R&D cooperation in Japanese hightech start-ups. Using a sample from an original survey conducted in 2008, we examine the effects of founder-, firm-, and industry-specific characteristics on R&D cooperation by the type of partners. Our findings indicate that founder-specific characteristics, such as educational background, academic affiliation, and prior innovation output, are fairly important in determining R&D cooperation with universities and public research institutes. We also provide evidence that founders' work experience and prior innovation output have positive and significant effects on R&D cooperation with business partners. With respect to firm-specific characteristics, it is found that firms investing more in R&D tend to engage in R&D cooperation, regardless of the type of partners. Furthermore, it is found that independent firms are less likely to cooperate on R&D with universities and public research institutes, than subsidiaries and affiliated firms.