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This paper examines how the extent of tournament in workplaces affects employees? likelihood of transitioning to entrepreneurship. In line with prior research, we use wage dispersion as proxy for tournament in the parent firm. We
argue that the effect of tournament on employees? propensity to engage in entrepreneurship depends on parent firms? size. Using a unique matched employer?employee longitudinal dataset from Denmark, we find that when tournament is high, employees in small firms are less inclined to become entrepreneurs while the opposite is observed for employees in large firms. We ascribe this finding to an interaction between a selection effect ? entrepreneurial minded individuals self-select in small firms ? and a treatment effect ?workplaces with high tournament discourage these particular individuals from becoming entrepreneurs, revealing an unobserved preference for competition. The findings document the importance of labor market sorting processes for our understanding of the relationship between tournament and entrepreneurship and have implications for firms aiming at retaining entrepreneurial minded employees.

Publikationsoplysninger

OriginalsprogEngelsk
Publikationsdato2015
Antal sider33
StatusUdgivet - 2015
BegivenhedThe DRUID Society Conference 2015 - LUISS Business School, Rome, Italien
Varighed: 15 jun. 201517 jun. 2015
Konferencens nummer: 37
http://druid8.sit.aau.dk/druid/registrant/index/login/cid/16

Konference

KonferenceThe DRUID Society Conference 2015
Nummer37
LokationLUISS Business School
LandItalien
ByRome
Periode15/06/201517/06/2015
SponsorLUISS Guido Carli - Libera Università Internazionale degli Studi Sociali Guido Carli
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ID: 43973140