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Which firms do the entrepreneurs come from?

Author

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  • Simon Parker

    (Durham University)

Abstract

Entrepreneurs who found new firms tend to work as employees in small rather than large firms prior to start-up and have previous experience of entrepreneurship. We provide a model of self-selection based on heterogeneous risk preferences which can explain these stylized facts.

Suggested Citation

  • Simon Parker, 2007. "Which firms do the entrepreneurs come from?," Economics Bulletin, AccessEcon, vol. 10(10), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-07j20003
    as

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    File URL: http://www.accessecon.com/pubs/EB/2007/Volume10/EB-07J20003A.pdf
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    References listed on IDEAS

    as
    1. Sarah Brown & Lisa Farrell & Mark N. Harris & John G. Sessions, 2006. "Risk preference and employment contract type," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(4), pages 849-863, October.
    2. C. Mirjam Van Praag & Hans Van Ophem, 1995. "Determinants of Willingness and Opportunity to Start as an Entrepreneur," Kyklos, Wiley Blackwell, vol. 48(4), pages 513-540, November.
    3. Parker, Simon C., 2006. "A Selection-Based Theory of the Transition from Employment to Entrepreneurship: The Role of Employer Size," IZA Discussion Papers 2071, Institute of Labor Economics (IZA).
    4. Cramer, J. S. & Hartog, J. & Jonker, N. & Van Praag, C. M., 2002. "Low risk aversion encourages the choice for entrepreneurship: an empirical test of a truism," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 29-36, May.
    5. repec:bla:kyklos:v:48:y:1995:i:4:p:513-40 is not listed on IDEAS
    6. Wagner, Joachim, 2004. "Are Young and Small Firms Hothouses for Nascent Entrepreneurs? Evidence from German Micro Data," IZA Discussion Papers 989, Institute of Labor Economics (IZA).
    7. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-748, August.
    8. Ekelund, Jesper & Johansson, Edvard & Jarvelin, Marjo-Riitta & Lichtermann, Dirk, 2005. "Self-employment and risk aversion--evidence from psychological test data," Labour Economics, Elsevier, vol. 12(5), pages 649-659, October.
    9. Boden, Richard Jr., 1996. "Gender and self-employment selection: An empirical assessment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 25(6), pages 671-682.
    10. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Werner, Arndt & Moog, Petra, 2009. "Why do Employees Leave Their Jobs for Self-Employment? – The Impact of Entrepreneurial Working Conditions in Small Firms," MPRA Paper 18826, University Library of Munich, Germany.
    2. Oberschachtsiek, Dirk, 2010. "How do local labor market conditions and individual characteristics affect quitting selfemployment?," Discussion Papers, Presidential Department P 2010-001, WZB Berlin Social Science Center.
    3. José María Millán & Emilio Congregado & Concepción Román, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 45-76.
    4. Parker, Simon C, 2009. "Why do small firms produce the entrepreneurs?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(3), pages 484-494, June.
    5. María J. Angulo-Guerrero & Elena Bárcena-Martín & Samuel Medina-Claros & Salvador Pérez-Moreno, 2024. "Labor market regulation and gendered entrepreneurship: a cross-national perspective," Small Business Economics, Springer, vol. 62(2), pages 687-706, February.
    6. Jean P. Sepulveda & Claudio Bonilla, 2014. "Determinants of the Risk Attitude in Entrepreneurship: Evidence from Latin America," Past Working Papers 18, Universidad del Desarrollo, School of Business and Economics.
    7. Johanna Gast & Arndt Werner & Sascha Kraus, 2017. "Antecedents of the small firm effect: the role of knowledge spillover and blocked mobility for employee entrepreneurial intentions," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 277-297, March.
    8. Leitão, João & Franco, Mário, 2008. "Individual Entrepreneurship Capacity and Performance of SMEs," MPRA Paper 8179, University Library of Munich, Germany, revised 09 Apr 2008.
    9. Robert P. Garrett & Chao Miao & Shanshan Qian & Tae Jun Bae, 2017. "Entrepreneurial spawning and knowledge-based perspective: a meta-analysis," Small Business Economics, Springer, vol. 49(2), pages 355-378, August.
    10. Arndt Werner & Johanna Gast & Sascha Kraus, 2014. "The effect of working time preferences and fair wage perceptions on entrepreneurial intentions among employees," Small Business Economics, Springer, vol. 43(1), pages 137-160, June.

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    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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