On the relationship between human capital and firm performance

This paper applies the ordinary least square regression model to estimate the effects of the human capital on the business performance of small and medium enterprises (SMEs) in Vietnam, emphasizing on the human capital of the firm owner. We exploit the cross-sectional data of SMEs for the year 2009. The estimated results show that basic and professional education of the firm owner are important factors affecting the success of the firm. Further, experience in owning a business can help the firm owners enhance their performance. Finally, knowledge from learning is seen to have a strong effect on entrepreneurial performance.