Why do Employees Leave Their Jobs for Self-Employment? – The Impact of Entrepreneurial Working Conditions in Small Firms

Werner, Arndt and Moog, Petra (2009): Why do Employees Leave Their Jobs for Self-Employment? – The Impact of Entrepreneurial Working Conditions in Small Firms.

Abstract

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
• Language: English
• 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 ; Personnel Economics > 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 ; Personnel Economics > M1 - Business Administration > M13 - New Firms ; Startups; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models

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