How On‐the‐Job Embeddedness Influences New Venture Creation and Growth

Abstract

This study aims to answer why some employees choose to start their own ventures, whereas others choose to seek jobs in other organizations after leaving their current employment. Drawing insights from knowledge‐based view and social capital theory, we examine the impact of on‐the‐job embeddedness on the decision of employee entrepreneurship, industry choice, and new venture growth. We argue that on‐the‐job embeddedness provides key resources for employees to start new ventures and grow them. We test our hypotheses with anel tudy of ntrepreneurial ynamics (PSED) data. Our results show that on‐the‐job embeddedness increases the probability of employees becoming entrepreneurs. Once they decide to become entrepreneurs, those employees with high on‐the‐job embeddedness are more likely to start new ventures in the industry in which they worked before. Moreover, employees' on‐the‐job embeddedness has a positive impact on new venture growth.

Notes

1. Due to missing values and selection process, our sample size dropped. Please check able 2 for details.

Additional information

Notes on contributors

Yiyuan Mai

Yiyuan Mai is professor at the School of Management, Huazhong University of Science and Technology.

Yanfeng Zheng

Yanfeng Zheng is an assistant professor of entrepreneurship at the School of Business, The University of Hong Kong.