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

  • Johanna GastEmail author
  • Arndt Werner
  • Sascha Kraus


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”).


Entrepreneurial intentions Small firms Small firm effect Blocked mobility 


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Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  1. 1.Montpellier Business School - MRM Labex EntreprendreMontpellier Cedex 4France
  2. 2.School of BusinessLappeenranta University of TechnologyLappeenrantaFinland
  3. 3.Chair of SME Management and EntrepreneurshipUniversity of SiegenSiegenGermany
  4. 4.Institute of EntrepreneurshipUniversity of LiechtensteinVaduzLiechtenstein

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