Human Capital and Venture Performance: The Role of Entrepreneur’s Culture and Business Environment in Nigeria

Abstract

Human capital is getting a wider attention with increasing globalization and competitiveness among enterprises and nation states. Both developed and developing countries put emphases on a more human capital development towards accelerating their economic growth and development. This paper examines the moderating effect of entrepreneur’s culture and business environment on the relationship of human capital and venture performance. In this study, Human capital was measured in terms of entrepreneur’s education, start-up experience and prior industry experience while venture performance is viewed in terms of sales growth and employment growth. Finally, the paper develops a model that explains the relationship between human capital and venture performance with a moderating effect of entrepreneur’s culture and business environment. We investigated fifty four small firms in Nigeria. A multi-stage random sampling and questionnaire were employed. The authors hypothesized that higher levels of inadequate entrepreneur’s education, industry and start-up experience moderated by culture and environment led to poor venture performance. A multiple regression analysis was used via SPSS software. The study observes that inadequate entrepreneur’s human capital moderated by business environment and/or culture has a significant effect on venture performance. We conclude that the relationship between human capital and venture performance is being influenced by other variables. Finally the study suggests among others that the government, its agencies and non-governmental organizations should embark on a massive awareness campaign among small business entrepreneurs on the effect of culture on venture performance.