Vigilio Failla, Francesca Mellilo and Toke Reichstein (CBS) have been nominated for the best paper award at the prestigious Academy of Management Conference which takes place in Philadelphia, Pennsylvania, US in August. This yearly conference is the largest conference in management world wide having more than 10000 participants. The paper was among thousands of considered papers. It is titled Unpredictably Stable. It questions whether movement into entrepreneurship in fact is associated with a rather unstable career path since the likelihood of failing often is relatively high. Indeed, the paper indicates that the choice of moving into entrepreneurship is a choice that will render their career more stable rather than unstable by lowering their employment turnover tendencies. The abstract of the paper reads:
Does entrepreneurship lower the losses associated with labor market mismatching by lowering employment turnover? This paper examines whether a transition to self-employment induces a shift into an individual’s stayer-mover tendency. Using a propensity score-matching technique, the hypothesis is tested on matched employer-employee data from the entire Danish population. The analysis reveals that self-employed stay longer in their employment status compared to individuals in paid-employment. This effect is not explained by reduced attractiveness to the wage sector (lock-in effect). We interpret this finding by crafting a theory in which entrepreneurship may resolve mismatches of individuals in the labor market and may inherently increase the value of non-monetary benefits, namely independence. This counterintuitive finding – self-employment yields greater stability, all else equal – has fundamental implications for the understanding of the returns to entrepreneurship.