When Do Employees Leave Their Job for Entrepreneurship?

Existing firms are argued to be an important source of new entrepreneurs. Yet, relatively little is known about the characteristics of firms that breed new entrepreneurs. We use a large linked employee-employer dataset to trace and characterize the types of firms which generate new entrepreneurs in...

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Bibliographic Details
Published in:The Scandinavian journal of economics 2008-03, Vol.110 (1), p.1-21
Main Authors: Hyytinen, Ari, Maliranta, Mika
Format: Article
Language:English
Subjects:
Business innovation
Business structures
Employee leave
Employees
Employment
Entrepreneurs
Entrepreneurship
Finland
G14
G31
G32
mobility
occupation choice
Occupational choice
Occupational mobility
Organizational analysis
Probability
Productivity
Research and development
Self employment
Size of enterprise
Technological innovation
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Summary:Existing firms are argued to be an important source of new entrepreneurs. Yet, relatively little is known about the characteristics of firms that breed new entrepreneurs. We use a large linked employee-employer dataset to trace and characterize the types of firms which generate new entrepreneurs in Finland. We find that such transitions are rare and that smaller firms spawn new entrepreneurs more frequently than larger firms. We also find that firms' R&D intensity and, to a lesser extent, their productivity are negatively related to the probability that employees transit into entrepreneurship. These results are robust to controlling for a number of employee and employer attributes.
ISSN:0347-0520
1467-9442
1467-9442
DOI:10.1111/j.1467-9442.2008.00522.x