Veranstaltungen  |  04.11.2015 |

Brown Bag-Seminar: The Unpredictably Stable Entrepreneur

Virgilio Failla (Institute for Strategy, Technology and Organization, LMU Munich)

This paper challenges the conventional belief that entrepreneurship is an unstable career path. Entrepreneurship is shown to decrease rather than increase individuals’ turnover tendencies. This finding persists after controlling for lock-in effects associated with sunk costs and unfavorable outside options.

Entrepreneurship is argued to represent a high quality job-match for individuals who otherwise portray above average turnover rates. Arguably, matching emerges from (i) preferences for independence, (ii) skills composition, and (iii) redeployability of human capital into new settings. The counter-intuitive finding – entrepreneurship yields greater employment stability – has fundamental implications for our understanding of entrepreneurship entry and labor market dynamics.