Why Do Employees Leave Their Jobs for Self-Employment? – The Impact of Entrepreneurial Working Conditions in Small Firms

40 Pages Posted: 23 Nov 2009

See all articles by Arndt Werner

Arndt Werner

Institute for Small and Medium Sized Enterprises, Bonn (IfM Bonn)

Petra M. Moog

University of Zurich - Department of Business Administration (IBW); University of Siegen - Dept. of Entrepreneurship and Business Sucession

Date Written: November 1, 2009

Abstract

Based on the finding that entrepreneurs who found new firms tend to work as employees of small rather than large firms prior to start-up, we test how different working conditions, which enhance entrepreneurial learning, affect their decision to become entrepreneurs when moderated by firm size. Based on data of the German Socio-Economic Panel (SOEP), we find a significant relationship between entrepreneurial learning (extracted in an orthogonal factor analysis based on twelve working conditions as proxy for entrepreneurial human capital and work experience) and firm size when predicting the probability of leaving paid employment for self-employment. We think, that this is a special kind of knowledge spillover. We also control for other aspects such as gender, age, wage, etc. – factors that may potentially influence the decision to become self-employed. Thus, our analysis sheds new light onto the black box of SMEs as a hotbed of new start-ups.

Keywords: Entrepreneurship, Occupational Choice, Working Conditions, Human Capital

JEL Classification: M16, M13, M54, J24, J28, C33

Suggested Citation

Werner, Arndt and Moog, Petra M. and Moog, Petra M., Why Do Employees Leave Their Jobs for Self-Employment? – The Impact of Entrepreneurial Working Conditions in Small Firms (November 1, 2009). Available at SSRN: https://ssrn.com/abstract=1511644 or http://dx.doi.org/10.2139/ssrn.1511644

Arndt Werner (Contact Author)

Institute for Small and Medium Sized Enterprises, Bonn (IfM Bonn) ( email )

Maximilianstra9e 20
53111 Bonn
Germany
+ 49 228 72997 44 (Phone)

Petra M. Moog

University of Zurich - Department of Business Administration (IBW) ( email )

Hottingerstrasse 10
Plattenstrasse 14
Zurich, 8032
Switzerland

University of Siegen - Dept. of Entrepreneurship and Business Sucession ( email )

Hölderlinstraße 3, HA 4106
Siegen, 57068
Germany

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