Leaving Employment to Entrepreneurship: The Value of Coworker Mobility in Pushed and Pulled-driven Startups

By combining the insights from the widespread research on entrepreneurial spin-offs and from the emerging literature on hiring choices in startups, we investigate the role of coworker mobility in pushed and pulled spin-offs survival. We address two main gaps identi ed in prior research: the relative inattention paid to other human resources beyond the founder, and the hetero-geneous context where employee startups may be established. We use a rich matched employer-employee dataset for Portugal, and estimate a multi-stage model addressing the issues of self-selection in entrepreneurship and endogeneity in recruitment choices. We find that spin-offs hiring coworkers from the parent fi rm survive longer. The survival bonus resulting from coworker mobility is higher in pushed-driven startups. This work has important implications for broader theories on the role of labor mobility in organizational outcomes of arrival fi rms, and also for developing theories on labor markets for entrepreneurship. It also constitutes an important step towards unpacking the mechanisms through which mobile human capital affects the performance of receiving firms.