Research Summary Previous literature has documented a large short-term earnings gap for entrepreneurs that return to the wage sector. Using matched employer-employee data from the Belgian Labor Market & Social Protection Database, we document how this initial gap is remarkably persistent. Former entrepreneurs earn 27% less than propensity-scored matched controls 5 years after returning to wage work, which is almost unchanged from the short-term earnings drop. About 60% of this gap results from reductions in hours worked while the remaining 40% is due to reductions in the wage rate. We offer evidence that the decline in hours worked is a choice of former entrepreneurs and therefore reflects a compensating differential, while the decline in the wage rate is a penalty resulting from statistical discrimination by employers. Managerial Summary While previous work recognizes that entrepreneurs experience reduced earnings when they return to the wage sector, little evidence exists about the long-term consequences of a spell of entrepreneurship. Using detailed administrative data from a large sample of Belgian entrepreneurs and wage employees, we document an earnings gap of about 27% compared with observationally equivalent employees 5 years after returning to wage work. About 60% of this earnings gap results from a reduction in hours worked, and this part appears to be the result of individual choices. The remaining 40% of the earnings gap is due to a decline in the wage rate, and this part appears to be imposed on returning entrepreneurs by employers.

This study aims to quantify and develop a deeper understanding of the parameters that underpin the development of a new, predictive, microscopic model of pedestrian movement with the potential to accurately reflect the complexity of flow dynamics now and into the future. It presents the results and analyses of two single file experiments designed to quantify the physical space taken up by the extent of a person's stepping movement (maximum step extent) and the minimum distance between points of inter-person contact (contact buffer) across a range of walking speeds. The experiments successfully used high-resolution optical motion capture and enhanced video analysis to quantify the dynamic changes in gait and spatial parameters, which were manifested as overlapping steps, and changes to step extent, step length, step frequency, and contact distance. The sum of the step extent and contact buffer, at different speeds, was found to be within a few centimetres of the inter-person distance (headway), leading to the conclusion that these parameters are therefore key components for the derivation of inter-person spacing and, hence, overall crowd movement. The work informs the longer term aim of developing the mathematical model which has the potential to include pedestrian demographics, walking ability and cognitive capabilities. (c) 2022 The Authors. Published by Elsevier B.V.

Research Summary This article advances a theory to explain why a spell of entrepreneurship affects the future wages of entrepreneurs returning to the wage sector. We propose that entrepreneurship holds a low rather than a negative information value, increasing the uncertainty around a job applicant's future productivity. Employers respond to this uncertainty by discounting the offered wage. The theory predicts that uncertainty in hiring—and thus the wage penalty—is more pronounced for entrepreneurs (a) who were in the upper tail of the wage distribution before the entrepreneurial spell, (b) who exited entrepreneurship quickly, and (c) who are hired by small employers. We test and find empirical support for these predictions using a novel dataset of matched entrepreneurs and employees from Belgium. Managerial Summary We investigate the effect of past entrepreneurial experience on the future wages of entrepreneurs who go back to paid employment. We propose that former entrepreneurs receive a pay cut because employers consider them as risky hires. In line with our theory, we find that former entrepreneurs are penalized the most (a) if they were highly paid employees before becoming founders, (b) if they were entrepreneurs only for a few years, (c) and if they are hired by small employers. Our findings caution star employees from experimenting with an entrepreneurial career, as failing fast is costly. Moreover, we suggest that firms value probationary contracts to lower the risk of hiring entrepreneurs while learning about their skills.

While previous work recognizes that entrepreneurs incur a pay cut when they return to the wage sector, a fundamental question is whether these initial wage losses are temporary or long-lasting. Using matched employer-employee data from Belgium, a country characterized by relatively high labor market frictions, we document a remarkable persistency: former entrepreneurs earn substantially less than equivalent employees years after entrepreneurship, and there is little indication this gap closes over time. While part of the losses stem from entrepreneurs working fewer hours, a significant fraction is due to entrepreneurs earning a lower daily wage. Drawing on market frictions and signaling lenses, we explore several candidate explanations for this finding. However, an economically meaningful penalty for most entrepreneurs remains unexplained. This is the wage persistency puzzle.

Improving an interface to increase control over interactions between existing product modules can create new product features which alter the basis of competition in mature (sub)markets. We empirically examine the impact of interface innovation by new market entrants from Japan in the high-end, professional camera submarket between 1955 and 1974. Prior to 1960, the industry architecture of the professional camera submarket was modular, dominated by German specialist body and specialist lens manufacturers. This market structure changed due to the success of integrated Japanese startups who, from 1961, offered novel automated exposure features, facilitated by improving the existing interface between the camera body and lens, and by making this interface a proprietary standard. Their success broke the mirror between the industry architecture, which became vertically integrated, while the product architecture remained modular.

The authors cast entrepreneurship as one of three career choices-remaining with one's employer, changing employers, or engaging in entrepreneurship-and theorize how the likelihood of entrepreneurship evolves over one's career. They empirically demonstrate an inverted U-shaped relationship between accumulated experience and entrepreneurship across various industries and jobs. The authors highlight the difficulty of inferring the mechanism underlying the observed relationship, despite detailed career history data and job displacement shocks that eliminate the current employer choice. These analyses motivate a formal career transitions model in which employer-specific and general skills accumulate with experience but potential employers observe only total skill. Results from the model presented here are that entrepreneurial career transitions vary with two relative costs: 1) the cost to an individual to form a business and 2) the cost to a potential employer to utilize the individual's employer-specific skills. The authors discuss how this model contributes new insights into an entrepreneurial career.

This paper reports on a new examination of the well-established negative effect of localized density on survival in established industries. We attempt to discriminate between three competing, but not necessarily mutually exclusive, explanations: resource competition, variations in the opportunity costs of entrepreneurship, and geographic variations in minimum efficient scale MES. We construct a model of firm growth and survival in which each of these potential causes of density dependence has a transparent parametric effect, and we derive six predictions that collectively allow for discriminating empirical tests. Empirical results using confidential geocoded data from the National Longitudinal Survey of Youth consistently favor the opportunity cost mechanism. This paper was accepted by Toby Stuart, entrepreneurship and innovation.

This summer we celebrate the 40 years anniversary of the publication of Abernathy and Utterback’s (1978) fundamental article on the industry lifecycle, which opened a fruitful avenue of research that continues to be relevant today. In this panel symposium we take stock of the research that has unfolded over the last 40 years, placing particular emphasis on the reinvigoration of industry lifecycle research that occured in the last decade. During this period, we have seen a large number of papers, from different scholarly traditions and different methodologies, that have greatly expanded the classical work that fleshed out what we know today as industry evolution theory: Abernathy & Utterback 1978; Anderson & Tushman 1990; Klepper 1997. Some of the more recent work has focused on the structural characteristics and strategic dynamics of the industry lifecycle, such as the role of submarkets in the industry lifecycle (Klepper & Thompson, 2006), the emergence of innovation shocks and the role of knowledge inheritance (Argyres, Bigelow, & Nickerson, 2015), the possibility of strategic reorientations during industry evolution (Eggers, 2012), and the importance of R&D collaborations (Kapoor & McGrath, 2014). Another recent research stream has uncovered the socio-cognitive dynamics of the industry lifecycle. This stream of research has identified the existence of a dominant category (Suarez, Grodal and Gotsopoulos, 2015), and elaborated on the co- evolution of categories and technologies (Grodal, Gotsopoulos, and Suarez, 2015). In this panel symposium we discuss these and other new directions of industry lifecycle research and elaborate on paths for future research.

We establish a correlation between the hierarchical structure of a firm and the likelihood of business creation among its former employees, using a sample of 16 million observations of Swedish workers and a novel proxy for hierarchies based on occupation data. Conditional on firm size and many other variables, employees in firms with more layers are less likely to enter entrepreneurship, to become self-employed, and to switch to another employer. The effects of layers are much stronger for business creation than for job-switching and they are stronger for entrepreneurship than for self-employment. We discuss two potential explanations for the distinctive hierarchy effect we find. Part of the effect could be to be due to preference sorting by employees, and part due to employees in firms with fewer layers having a broader range of skills. One test showing that the probability of entrepreneurship increases with their prior rank in an organization is consistent with ability sorting and inconsistent with preference sorting.

We study the causes and consequences of the replacement of founder-CEOs in a sample of 4,172 Danish start-ups. We propose that founder-CEO replacement is driven in part by mismatches between business quality and founder ability. Our framework suggests that replacements are more likely among the worst- and best-performing firms, with low (high)-ability founders replaced by manager with higher (lower) ability. Replacement is not unambiguously associated with better subsequent performance. Firms that replaced the founder were much more likely to fail, but the surviving firms among them grew considerably faster. Our empirical results are consistent with these proposed predictions. Copyright (c) 2015 Strategic Management Society

Lazear's jack–of–all–trades theory suggests that individuals with balanced skills are more likely to become entrepreneurs, and that balanced skills can be accumulated by studying a varied curriculum, working in a variety of functions, and working for a variety of employers. We reexamine the theory using a matched case–control sample, constructed from a professional networking website that controls for unobserved heterogeneity in employer and job characteristics. We find evidence that variety predicts entry into entrepreneurship, largely through its positive association with the likelihood of having certain specific skills. However, our analysis also demonstrates that attempts to identify the effects of skill variety on entrepreneurship are likely to be highly sensitive to sample construction and regression specification.

This paper reports the results of a new examination of the well-established negative effect of localized density on survival in established industries. In the standard theory, this effect is generically attributed to resource competition, where both “resource” and “competition” are broadly defined. We posit and test the competition story against two alternative mechanisms – associations between local density and (i) the opportunity cost of entrepreneurs’ time, and (ii) geographic variations in minimum efficient scale. Using a sample from the confidential geocoded NLSY, we find evidence that consistently points in favor of the opportunity cost mechanism.

The goal in abdominal wall reconstruction (AWR) is to minimize morbidity and prevent hernia recurrence. Components separation and mesh reconstruction are two options, however, with advantages and disadvantages. The purpose of this review was to investigate outcomes in patients with abdominal wall hernia undergoing primary closure with component separation (CS) versus CS with acellular dermal matrix (ADM) reinforcement (CS + mesh). Medical records of consecutive patients who underwent abdominal wall reconstruction using CS with or without ADM reinforcement were retrospectively reviewed. Primary fascial closure was achieved in all patients. ADM reinforcement when used was performed using the underlay technique. Reconstructive technique and postoperative complications including delayed healing, skin necrosis, fistula, seroma, hematoma and surgical site infection, recurrence, and reoperation were recorded. Comparisons between the two groups were assessed. One hundred and seven patients were included (mean age, 55.7; 51.4% male; median follow-up 297 days). Twenty-six patients (24%) underwent CS alone; whereas 81 patients (76%) CS + mesh placement. Patient comorbidities, including smoking (26%), diabetes (20%), and hypertension (46%); body mass index (mean 32.3 ± 7.6); and albumin level on the day of surgery (mean 3.4 ± 0.5 mg/dL) were not significantly different between groups. Surgical site infection was significantly higher among CS + mesh patients (22.2%) versus CS only patients (3.9%) (P = 0.02). The recurrence rate of abdominal hernia was significantly lower in CS + mesh patients compared with CS only (14.8% vs 34.6%; P = 0.02). No significant differences in other postoperative complications were identified between the two groups. ADM reinforcement at the time of components separation is often selected in more complex, higher risk patients. Although the incidence of infection was higher in these patients, it was usually treated without mesh removal and recurrence rate was significantly lower when compared to CS alone.

In this panel symposium, we aim to stimulate a rich discussion between different perspectives of theories of heterogeneity within industries and markets. This heterogeneity has been defined through various terms, such as strategic groups, niches, segments, categories, or submarkets, each focusing on diverse features of the product characteristics space. On one hand, industry evolution literature has gradually shifted to studying industries persisting as fragmented and heterogeneous product markets that offer new opportunities for entrants. On the other hand, a recent research stream on economic sociology and organization theory focused on how cognitive representations of economic actors divide markets into categories. Although these two different fields have different perspectives to understand heterogeneity within industry structures, there is a potential to inform each other. In this symposium, after briefly going over what have we have learned on theories of heterogeneity within industry and market structures so far, we will draw on these two different research fields in order to bridge established theories in these fields, and aim to come up with a further research agenda to inform both of these fields in their shortcomings.

We study possible motivations for co-entrepenurial couples to start up a joint firm, using a sample of 1,069 Danish couples that established a joint enterprise between 2001 and 2010. We compare their pre-entry characteristics, firm performance and post-dissolution private and financial outcomes with a selected set of comparable firms and couples. We find evidence that couples often establish a business together because one spouse – most commonly the female – has limited outside opportunities in the labor market. However, the financial benefits for each of the spouses, and especially the female, are larger in co-entrepreneurial firms, both during the life of the business and post-dissolution. The start-up of co-entrepreneurial firms seems therefore a sound investment in the human capital of both spouses as well as in the reduction of income inequality in the house hold. We find no evidence of non-pecuniary benefits or costs of co-entrepreneurship.

Lazear (2005) suggest that entrepreneurs tend to be Jack-of-All- Trades to engage in a variety of tasks when starting up a business. We reexamine the Jack-of-All-Trades theory of entrepreneurship by using a matched case-control sample constructed from a professional networking website. We test this theory in a group of 325 founders currently in the venture capital and private equity industry with 1571 matched controls. We find that the frequently documented effect of balanced skills on entrepreneurship does not exist under the matched case-control design.

This symposium is composed of four papers that closely examine important aspects of employee entrepreneurship, including (1) the acquisition of entrepreneurial skills from specific work experience, (2) the selection of founding partners and early employees, and (3) the configuration of the employment process. From three individual perspectives regarding founder learning, team selection and employee management, the results and arguments presented in these papers intend to provide new insights into the determinants of performance differentials across new firms. Managing Jobs or Managing People? Employment Processes and their Effects on Worker Mobility Presenter: Matthew J. Bidwell; U. of Pennsylvania Entrepreneurial Firm Performance and Career Histories of Founders Presenter: Daniel Olson; U. of Maryland Better the Devil You Know: Selection of Founding Team Members and Start- up Performance Presenter: Martin Ganco; U. of Minnesota Presenter: Benjamin A. Campbell; The Ohio State U. Firm Characteristics and Employee Entrepreneurs’ Choice of Cofounders and Early Employees Presenter: Jing Chen; Copenhagen Business School