Experience and Entrepreneurship: A Career Transition Perspective

Christopher I. Rider, Peter Thompson (), Aleksandra Kacperczyk and Joacim Tåg
Additional contact information
Christopher I. Rider: Goizueta Business School, Postal: Emory University
Aleksandra Kacperczyk: Sloan School of Management, Postal: Massachusetts Institute of Technology

No 970, Working Paper Series from Research Institute of Industrial Economics

Abstract: We cast entrepreneurship as one of three career choices – remaining with one’s employer, changing employers, or engaging in entrepreneurship – and theorize how the likelihood of entrepreneurship evolves over one’s career. We empirically demonstrate an inverted U-shaped relationship between accumulated experience and entrepreneurship across various industries and jobs. Despite detailed career history data and job displacement shocks that eliminate the current employer choice, we highlight the difficulty of inferring the mechanism underlying the observed relationship. These analyses motivate a formal career transitions model in which employer-specific and general skills accumulate with experience but potential employers observe only total skill. The upshot of our model is that entrepreneurial career transitions vary with two relative costs: (1) to an individual of forming a business and (2) to a potential employer of utilizing the individual’s employer-specific skills. We discuss how this model contributes new insights into entrepreneurial careers.

Keywords: Entrepreneurship; Employee mobility; Experience (search for similar items in EconPapers)
JEL-codes: D20 J20 L26 M50 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2013-08-06, Revised 2019-02-18
New Economics Papers: this item is included in nep-bec, nep-cse, nep-cwa, nep-sbm and nep-spo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Experience and Entrepreneurship: A Career Transition Perspective (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0970

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