How Do Entrepreneurial Bosses Influence Their Employees' Future Entrepreneurship Choices?

41 Pages Posted: 3 Jan 2017

See all articles by Vera Rocha

Vera Rocha

Copenhagen Business School

Mirjam van Praag

University of Amsterdam - Department of Economics; Copenhagen Business School; Tinbergen Institute; IZA Institute of Labor Economics

Date Written: December 2016

Abstract

We adopt a process-based approach to investigate the influence of entrepreneurial bosses on the two main decisions of employees towards becoming entrepreneurs: exit from the current firm and entry into entrepreneurship. In other words, we study the push and pull mechanisms possibly underlying the influence of entrepreneurial bosses. We do so by employing an identification strategy based on comparisons of same-gender matches of bosses and employees, using rich register data for Denmark. We show that same-gender entrepreneurial bosses have a great impact on employees' future entrepreneurship choices, especially among women. We do not find any evidence that female bosses push female employees out of the workplace, by creating a discriminatory environment that forces them to search for alternative career paths. Instead, our analysis finds consistent support for pull mechanisms, with role modeling being the main explanation for the positive influence of female entrepreneurial bosses on female employees' transition into entrepreneurship. We show that the female boss effect is greater than other social interactions identified in prior research. We conclude that entrepreneurial bosses can be role models and female entrepreneurial bosses may thus act as a lever to reducing gender gaps in entrepreneurship rates.

Keywords: entrepreneurship, female leadership, gender gaps, role models

JEL Classification: J16, J24, L26, M12, M13

Suggested Citation

Rocha, Vera and van Praag, Mirjam and van Praag, Mirjam, How Do Entrepreneurial Bosses Influence Their Employees' Future Entrepreneurship Choices? (December 2016). CEPR Discussion Paper No. DP11715, Available at SSRN: https://ssrn.com/abstract=2893048

Vera Rocha (Contact Author)

Copenhagen Business School ( email )

Mirjam Van Praag

University of Amsterdam - Department of Economics ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 20 525 4096 (Phone)
+31 20 525 4182 (Fax)

Copenhagen Business School ( email )

Kilevej 14A
Frederiksberg, 2000
Denmark

Tinbergen Institute

Gustav Mahlerlaan
Amsterdam
Netherlands

IZA Institute of Labor Economics

Schaumburg-Lippe-Str. 7 / 9
Bonn, D-53072
Germany

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