Werner, Arndt and Moog, Petra (2009): Why do Employees Leave Their Jobs for Self-Employment? – The Impact of Entrepreneurial Working Conditions in Small Firms.
Download (205Kb) | Preview
Based on the finding that entrepreneurs who found new firms tend to work as employees of small rather than large firms prior to start-up, we test how different working conditions, which enhance entrepreneurial learning, affect their decision to become entrepreneurs when moderated by firm size. Based on data of the German Socio-Economic Panel (SOEP), we find a significant relationship between entrepreneurial learning (extracted in an orthogonal factor analysis based on twelve working conditions as proxy for entrepreneurial human capital and work experience) and firm size when predicting the probability of leaving paid employment for self-employment. We think, that this is a special kind of knowledge spillover. We also control for other aspects such as gender, age, wage, etc. – factors that may potentially influence the decision to become self-employed. Thus, our analysis sheds new light onto the black box of SMEs as a hotbed of new start-ups.
|Item Type:||MPRA Paper|
|Original Title:||Why do Employees Leave Their Jobs for Self-Employment? – The Impact of Entrepreneurial Working Conditions in Small Firms|
|Keywords:||Entrepreneurship, Occupational Choice, Working Conditions, Human Capital|
|Subjects:||J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J28 - Safety; Job Satisfaction; Related Public Policy
M - Business Administration and Business Economics; Marketing; Accounting > M5 - Personnel Economics > M54 - Labor Management
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
M - Business Administration and Business Economics; Marketing; Accounting > M1 - Business Administration > M13 - New Firms; Startups
C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models; Multiple Variables > C33 - Models with Panel Data; Longitudinal Data; Spatial Time Series
|Depositing User:||Arndt Werner|
|Date Deposited:||23. Nov 2009 17:36|
|Last Modified:||15. Feb 2013 15:39|
Agarwal R, Echambadi R, Franco AM, Sarkar MB. 2004. Knowledge transfer through inheri-tance: Spin-out generation, development, and survival. Academy of Management Journal 47(4): 501-522.
Agarwal R, Campbell BA, Ganco M, April MF. 2009. Who leaves, where to, and why worry? Employee mobility, employee entrepreneurship, and effects on source firm performance. Working Paper, Universities of Illinois, Ohio State and Toronto.
Anderson AR, Miller CJ. 2003. Class Matters: Human and Social Capital in the Entrepreneu-rial Process. Journal of Socio economics 32(1): 15–36.
Andersson P, Wadensjö E. 2006. Employees Who Become Self-Employed: Do Labour Inco-me and Wages Have an Impact? IZA Discussion Papers No. 1971.
Backes-Gellner U, Moog P. 2009. Social Capital and the willingness to become self-employed: Is there a difference between women and men? Journal of International Studies of Management and Organization (ISMO) 39(2): 33–64.
Backes-Gellner U, Werner A. 2007. Entrepreneurial Signaling via Education: A Success Fac-tor in Innovative Start-Ups. Small Business Economics 29(2007)1-2: 173-190.
Baum CF. 2006. An Introduction to Modern Economics Using Stata. Texas: Stata Press.
Baumol WJ. 2004. Education for Innovation: Entrepreneurial Breakthroughs vs. Corporate Incremental Improvements. NBER Working Papers 10578.
Becker GS. 1962. Investment in Human Capital: a theoretical analysis. Journal of Political Economy 70(5/2): 9-49.
Becker GS. 1964. Human Capital; a Theoretical and Empirical Analysis, with Special Refe-rence to Education. National Bureau of Economic Research. General Series No. 80. NY.
Benz M, Frey B. 2004. Being Independent raises Happiness at Work. Swedish Economic Pol-icy Review 11(2): 97–134.
Blanchflower, DG. 2000. Self-employment in OECD Countries. Labour Economics 7(5): 471–505.
Blanchflower DG, Meyer B. 1994. A Longitudinal Analysis of Young Self-employed in Aus-tralia and the United States. Small Business Economics 6(1): 1–20.
Blanchflower DG, Oswald AJ. 1998. What makes an Entrepreneur? Journal of Labor Eco-nomics 16(1): 26–60.
Boden RJ. 1996. Gender and Self-employment selection: an empirical assessment. Journal of Socioeconomics 25(6): 671-682.
Burton MD, Sørensen JB, Beckman C. 2002. Coming from good stock: Career histories and new venture formation. Research in the sociology of organizations 19: 229-262.
Cameron AC, Trivedi PK. 2009. Microeconometrics using Stata. Texas: Stata Press.
Chell E. 1984. The entrepreneurial personality: a few ghosts laid to rest. International Small Business Journal. 3(3): 43 – 54.
Constant TA, Zimmermann KF. 2004. Self-Employment Dynamics Across the Business Cy-cle: Migrants Versus Natives. IZA Discussion Paper No. 1386.
Davidsson P, Honig B. 2003. The role of social and human capital among nascent entrepre-neurs. International Journal of Business Venturing. 18(3): 301–331.
Delmar F., Davidsson P. 2000. Where do they come from? Prevalence and characteristics of nascent entrepreneurs. Entrepreneurship & Regional Development 12(1): 1-23.
Dunn T, Holtz-Eakin D. 2000. Financial Capital, Human Capital and the Transition to Self-Employment: Evidence from Intergenerational Links. Journal of Labor Economics 18(2): 282–305.
EIM 2003: Second Career – Self- employment and becoming an entrepreneur as a second career for dependent employees. EIM Business & Policy Research. http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/second_career.
Erikson T. 2002. Brother Correlations in Earnings in Denmark, Finland, Norway and Sweden Compared to the United States”. Journal of Population Economics 15(4): 757-772.
Evans DS, Leighton LS. 1989. Some Empirical Aspects of Self-employment. American Eco-nomic Review 79(3): 519–535.
Evans DS, Jovanovic B. 1989. An Estimated Model of Entrepreneurship Choice under Li-quidity Constraints. Journal of Political Economy 97(4): 808–828.
Fairlie R, Robb A. 2003. Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey. Yale University Economic Growth Center Dis-cussion Paper No. 871. Available at SSRN: http://ssrn.com/abstract=464243.
Florin J, Lubatkin M, Schulze W. 2003. A Social Capital Model of High-Growth Ventures. Academy of Management Journal. 46(3): 374-384.
Ganco, M. 2009. The influence of technological interdependence on employee entrepreneur-ship and mobility: Evidence from the semiconductor industry. Working paper. University of Illinois.
Gompers P, Lerner J, Scharfstein D. 2005. Entrepreneurial Spawning: Public Cooperations and the Genesis of New Ventures, 1986 to 1999. Journal of Finance 60(2): 577–614.
Hamilton B. 2000. Does Entrepreneurship Pay? An Empirical Analysis of Returns to Self-Employement. Journal of Political Economy 108(3): 605–631.
Helfat CE, Lieberman MB. 2002. The birth of capabilities: Market entry and the importance of pre-history. Industrial and Corporate Change 11(4): 725 - 760.
Hellmann T. 2007. When do employees become entrepreneurs? Management Science 53(6): 919- 933.
Herron L, Robinson RB. 1993. A structural model of the effects of entrepreneurial character-istics on venture performance. Journal of Business Venturing. 8(3): 281 – 294.
Hundley G. 2001. Why Women Earn less than Men in Self-Employment. Journal of Labor Research 22(4): 817 - 829.
Hyytinen A, Maliranta M. 2006. When do Employees leave their Job for Entrepreneurship: Evidence from Linked Employer-Employee Data. ETLA Discussion Paper 1023.
Jovanovic B. 1982. Selection and the Evolution of Industry. Econometrica 50(3): 649-670.
Kawaguchi D. 2002. Compensating Wage Differentials among Self-employed Workers: Evi-dence from Job Satisfaction Scores. Discussion Paper 568, Institute of Social and Economic Research, Osaka University.
Lazear EP. 2005. Entrepreneurship, Journal of Labor Economics 23(4): 649-680.
Lenox M, King A. 2001. Who adopts management standards early? An examination of ISO 14001 certifications. Best Paper Proceedings of the Academy of Management. A1-A6.
Lerner J, Malmendier U. 2007. With a Little Help from My (Random) Friends: Success and Failure in Post-Business School Entrepreneurship. Working Paper, Stanford University. De-cember 2007.
Lewis-Beck MS (ed). 1994. Factor analysis & related techniques. International Handbooks of Quantitative Applications in the Social Sciences. Vol. 5. Sage: London.
Long SJ, Freese J. 2001. Regression Models for Categorical Dependent Variables Using Stata. College Station, Stata Press.
Long SJ, Freese J. 2006. Regression Models for Categorical Dependent Variables Using Stata, 2nd edition. College Station, Stata Press.
Mincer J. 1970. The Distribution of Labor Incomes. A Survey. With Special Reference to the Human Capital Approach. Journal of Economic Literature. 8(1): 1 - 26.
Mincer J. 1974. Schooling, experience and earnings. Columbia University Press: New York.
Mitchel MN, Chen X. 2005. Visualizing main effects and interactions for binary logit models. Stata Journal 5(1): 64-82.
Moog P. 2004. Humankapital des Gründers und Erfolg der Unternehmensgründung. Gabler DUV: Wiesbaden.
Mueller P. 2006. Entrepreneurship in the region: Breeding ground for nascent entrepreneurs? Small Business Economics 27(1): 41-58.
Nanda R, Sorensen JB. 2008. Peer Effects and Entrepreneurship. Harvard Business School Entrepreneurial Management Working Paper No. 08-051. Available at SSRN: http://ssrn.com/abstract=1084874.
Norten EC, Wang H, Ai C. 2004. Computing interaction effects and standard errors in logit and probit models. Stata Journal 4(2): 154-167.
Parker SC. 2007. Which firms do the entrepreneurs come from? Economics Bulletin 10(10): 1-9.
Parker SC. 2009. Why do small firms produce the entrepreneurs? The Journal of Socio-Economics 38(2009): 484–494.
Parker SC. 2004. The Economics of Self-Employment and Entrepreneurship. University Press: Cambridge.
Peña, I. 2002. Intellectual capital and business start-up success. Journal of Intellectual Capital 3(2): 180 – 198.
Rajan RG, Zingales L. 2001. The Firm as a Dedicated Hierarchy: a Theory of the Origins and Growth of Firms. The Quarterly Journal of Economics 116(3): 805–851.
Romanelli E. 1989. Environments and Strategies of Organizational Start Up: Effects on Early Survival. Administrative Science Quarterly 34(3): 369-387.
Shane S, Venkataraman S. 2000. The promise of entrepreneurship as a field of research. The Academy of Management Review 25(1): 217-226.
Silva O. 2006. The Jack-of-All-Trades Entrepreneur: Innate Talent or Acquired Skill? IZA Discussion Papers No. 2264, Institute for the Study of Labor (IZA).
Sorensen JB. 2007. Bureaucracy and Entrepreneurship: Workplace Effects on Entrepreneurial Entry. Administrative Science Quarterly 52(3): 387-412.
Thurik R. 2002. Setting up a business in the Netherlands: who starts, who gives up and who is still trying. Frontiers of Entrepreneurship Research 2001, W.D. Bygrave etc (eds), (Center for Entrepreneurial Studies, Babson College, MA).
Van de Ven W, van Praag B. 1981. The Demand for Deductibles in Private Health Insurance: A Probit Model with Sample Selection. Journal of Econometrics 17(2): 229-252.
Van Praag M, van Ophem H. 1995. Determinants of Willingness and Opportunity to Start as an Entrepreneur. Kyklos International Review for Social Sciences 48(4): 513-540.
Van Praag M, van der Sluis J, Vijverberg W. 2005. Entrepreneurship selection and perfor-mance: A meta-analysis of the impact of education in less developed countries. World Bank Economic Review 19(2): 225-261.
Wagner, J. 2007. What a difference a Y makes - Female and male nascent entrepreneurs in Germany. Small Business Economics 28(1): 1-21.
Wagner J. 2003. Testing Lazear's Jack-of-all-trades - View of Entrepreneurship with German Micro Data. Applied Economics Letters 10(11): 687 – 689.
Wagner J. 2004. Are Young and Small Firms Hothouses for Nascent Entrepreneurs? Applied Economics Quarterly 50(4): 379–391.
Wennberg K. 2008. Knowledge combinations and the survival of financial services ventures. Working Paper Series in Business Administration 2008:1, Stockholm School of Economics.
Werner A. 2004. Arbeitsbedingungen in KMU – Eine multivariate Analyse. In: Jahrbuch zur Mittelstandsforschung, IfM Bonn (ed). DUV Gabler 2/2004: 1–20.
Werner A, Kay R. 2006. Entrepreneurial Image, Gender, and the Formation of New Ventures. Die Betriebswirtschaft 5(6): 497–521.