Tournament in Workplace and Entrepreneurial Entry: The Interplay between Selection and Treatment Effects

Virgilio Failla, Francesca Melillo, Toke Reichstein

Publikation: Bidrag til konferencePaperForskningpeer review

Resumé

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.
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.

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
Internetadresse

Citer dette

Failla, V., Melillo, F., & Reichstein, T. (2015). Tournament in Workplace and Entrepreneurial Entry: The Interplay between Selection and Treatment Effects. Afhandling præsenteret på The DRUID Society Conference 2015, Rome, Italien.
Failla, Virgilio ; Melillo, Francesca ; Reichstein, Toke. / Tournament in Workplace and Entrepreneurial Entry : The Interplay between Selection and Treatment Effects. Afhandling præsenteret på The DRUID Society Conference 2015, Rome, Italien.33 s.
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Failla, V, Melillo, F & Reichstein, T 2015, 'Tournament in Workplace and Entrepreneurial Entry: The Interplay between Selection and Treatment Effects' Paper fremlagt ved The DRUID Society Conference 2015, Rome, Italien, 15/06/2015 - 17/06/2015, .

Tournament in Workplace and Entrepreneurial Entry : The Interplay between Selection and Treatment Effects. / Failla, Virgilio; Melillo, Francesca; Reichstein, Toke.

2015. Afhandling præsenteret på The DRUID Society Conference 2015, Rome, Italien.

Publikation: Bidrag til konferencePaperForskningpeer review

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AU - Failla,Virgilio

AU - Melillo,Francesca

AU - Reichstein,Toke

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AB - 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. Weargue 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.

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Failla V, Melillo F, Reichstein T. Tournament in Workplace and Entrepreneurial Entry: The Interplay between Selection and Treatment Effects. 2015. Afhandling præsenteret på The DRUID Society Conference 2015, Rome, Italien.