Human capital, its constituents and entrepreneurial innovation: a multi-level modelling of global entrepreneurship monitor data

In this study, we use multi-level modelling to analyse data of over 200,000 businesses in 96 countries to explain the failure of previous research to extend human capital theory to innovation. We trace this failure to, previously overlooked, conflicting influences of education and experience, the two key constituents of human capital that are often used in research as innovation influences, and present a conceptual and empirical case against the use of work experience as a constituent of human capital. Our hierarchical exploration of innovation antecedents shows that, at the individual level, being young and recently educated are significant predictors of innovation whereas, at the societal level, national wealth dampens the negative effect of age on innovation and accentuates the positive effect of education on it.