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Antecedents of the small firm effect: the role of knowledge spillover and blocked mobility for employee entrepreneurial intentions

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Abstract

Small firms are said to produce more entrepreneurs than larger ones (“small firm effect”). Applying existing theories, we analyze how different management positions influence employee entrepreneurship in small firms. Based on a panel study of 4832 cases, we provide evidence for the fact that small firms indeed produce more entrepreneurs. Moreover, we show that lower management positions of small firm employees are responsible for this small firm effect. We conclude that small firms seem to create an environment in which employees on low management positions strongly benefit from knowledge spillover effects as they are educated necessary skills, knowledge and expertise, and are able to build up networks conducive to entrepreneurship (“knowledge spillover effect”), while not having the multifaceted advancement opportunities as in large companies (“blocked mobility effect”).

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Authors and Affiliations

  1. Montpellier Business School - MRM Labex Entreprendre, 2300 Avenue des Moulins, 34185, Montpellier Cedex 4, France

    Johanna Gast

  2. School of Business, Lappeenranta University of Technology, P.O. Box 20, 53851, Lappeenranta, Finland

    Johanna Gast

  3. Chair of SME Management and Entrepreneurship, University of Siegen, Am Eichenhang 50, 57076, Siegen, Germany

    Arndt Werner

  4. Institute of Entrepreneurship, University of Liechtenstein, Fürst-Franz-Josef-Strasse, 9490, Vaduz, Liechtenstein

    Sascha Kraus

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  1. Johanna Gast
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  3. Sascha Kraus
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Correspondence to Johanna Gast.

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Gast, J., Werner, A. & Kraus, S. Antecedents of the small firm effect: the role of knowledge spillover and blocked mobility for employee entrepreneurial intentions. Int Entrep Manag J 13, 277–297 (2017). https://doi.org/10.1007/s11365-016-0403-x

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