Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 825: Hybrid Entrepreneurship

Timothy B. Folta (), Frédéric Delmar () and Karl Wennberg ()
Additional contact information
Timothy B. Folta: Krannert School of Management, Postal: Purdue University, 403 West State Street, West Lafayette, IN 47907-2056 USA
Frédéric Delmar: Research Institute of Industrial Economics (IFN), Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden
Karl Wennberg: Imperial College Business School, Postal: Innovation & Entrepreneurship Group, South Kensington Campus, London SW7 2AZ, UNITED KINGDOM

Abstract: In contrast to previous efforts to model the individual’s movement from wage work into entrepreneurship, we consider that individuals might transition incrementally by retaining their wage job while entering into self-employment. We show that these hybrid entrepreneurs represent a significant share of all entrepreneurial activity. Theoretical arguments are proposed to suggest why hybrid entrants are distinct from self-employment entrants, and why hybrid entry may facilitate subsequent entry into full self-employment. We demonstrate that there are significant theoretical and empirical consequences for this group and our understanding of self-employment entry and labor market dynamics. Using matched employee-employer data over eight years, we test the model on a population of Swedish wage earners in the knowledge-intensive sector.

Keywords: Hybrid entrepreneurship; Self-employment; Labour market dynamics; Transition determinants; Employee-employer data

JEL-codes: H39; J24; L26

39 pages, March 11, 2010

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