Author Abstract
We examine whether the likelihood of entrepreneurial activity depends on the prior career experiences of an individual's co-workers. We argue that peers may increase an individual's likelihood of becoming an entrepreneur through two channels: by increasing the likelihood that an individual will perceive entrepreneurial opportunities, and by increasing his or her willingness to pursue those opportunities. Our analysis uses a unique panel dataset that allows us to track the career histories of individuals across firms. We find that an individual is more likely to become an entrepreneur if his or her co-workers have been entrepreneurs before, or if the co-workers' careers involved frequent movement between firms. Peer influences appear to be substitutes for direct experience: the effects are strongest for those without exposure to entrepreneurship in their family of origin, and for those who have engaged in little inter-firm mobility themselves. These effects are robust to attempts to address concerns about unobserved heterogeneity bias.
Paper Information
- Full Working Paper Text
- Working Paper Publication Date: January 2008
- HBS Working Paper Number: 08-051
- Faculty Unit(s): Entrepreneurial Management