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parent. Although the intergenerational transmission of business ownership is strong, the

underlying causes of intergenerational links in business ownership have not been

identified in the literature. They may be due to the acquisition of general business or

managerial experience in family-owned businesses ("general business human capital"),

the acquisition of industry- or firm-specific business experience in family-owned

businesses ("specific business human capital"), inheritances of businesses, or a

correlation among family members in preferences for entrepreneurial activities.

Using data from the Characteristics of Business Owners (CBO), we provide some

suggestive evidence on the importance of these factors and explore the related question of

whether having a self-employed parent or other family member improves small business

outcomes. Although strong intergenerational links in self-employment have been

repeatedly documented in the literature, the effects on small business outcomes

conditioning on ownership are essentially unknown. We also estimate the independent

effects of having a self-employed family member, prior work experience in that family

member's business, and prior work experience in a similar business on small business

outcomes. The results have implications for the roles that general and specific business

human capital and the correlation across family members in entrepreneurial preferences

play in determining business success.3 Another question that we examine is whether

business inheritances are an important method of intergenerational transmission of

business ownership. Previous research analyzing employer businesses from the National

3 Using the National Longitudinal Surveys (NLS), Dunn and Holtz-Eakin (2000) find that the intergenerational correlation in self-employment is strongest for successfully self-employed parents suggesting that the transmission of business skills instead of similarities in tastes for the self-employed lifestyle drives the relationship between parents' and children's self-employment propensities. They also find that self-employed sons follow their father's occupation in only 32 percent of cases suggesting that the business expertise being passed within families is not only

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