This paper is a comment on Mobilizing Venture Capital During the Second Industrial Revolution: Cleveland, Ohio, 1870 - 1920 by Naomi R. Lamoreaux, Margaret C. Levenstein and Kenneth L. Sokoloff which can be found at: "http://ssrn.com/abstract=2205966" http://ssrn.com/abstract=2205966

Using the matched employer-employee data set for Denmark and information on the founders of new firms, we analyze the hiring choices of all new firms that entered in 1995-2001. We develop a theoretical model in which the quality of a firm's employees determines its average cost, a firm's...