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

Virgilio Failla, Francesca Melillo, Toke Reichstein

    Research output: Contribution to conferencePaperResearchpeer-review

    Abstract

    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.

    Conference

    ConferenceThe DRUID Society Conference 2015
    Number37
    LocationLUISS Business School
    CountryItaly
    CityRome
    Period15/06/201517/06/2015
    SponsorLUISS Guido Carli - Libera Università Internazionale degli Studi Sociali Guido Carli
    Internet address

    Cite this

    Failla, V., Melillo, F., & Reichstein, T. (2015). Tournament in Workplace and Entrepreneurial Entry: The Interplay between Selection and Treatment Effects. Paper presented at The DRUID Society Conference 2015, Rome, Italy.
    Failla, Virgilio ; Melillo, Francesca ; Reichstein, Toke. / Tournament in Workplace and Entrepreneurial Entry : The Interplay between Selection and Treatment Effects. Paper presented at The DRUID Society Conference 2015, Rome, Italy.33 p.
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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 presented at, Rome, Italy, 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. Paper presented at The DRUID Society Conference 2015, Rome, Italy.

    Research output: Contribution to conferencePaperResearchpeer-review

    TY - CONF

    T1 - Tournament in Workplace and Entrepreneurial Entry

    T2 - The Interplay between Selection and Treatment Effects

    AU - Failla,Virgilio

    AU - Melillo,Francesca

    AU - Reichstein,Toke

    PY - 2015

    Y1 - 2015

    N2 - 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.

    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.

    M3 - Paper

    ER -

    Failla V, Melillo F, Reichstein T. Tournament in Workplace and Entrepreneurial Entry: The Interplay between Selection and Treatment Effects. 2015. Paper presented at The DRUID Society Conference 2015, Rome, Italy.