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Bureaucracy, work organization, and the transition to entrepreneurship

Author

Listed:
  • Jacob Rubæk Holm

    (Aalborg University Business School)

  • Kristian Nielsen

    (Aalborg University Business School)

  • Bram Timmermans

    (NHH Norwegian School of Economics)

Abstract

Empirical studies have often established a negative relationship between the size of a firm where an individual is employed and the probability of that individual subsequently founding a business. This literature suggests that size captures work organization—particularly bureaucracy—and that bureaucracy affects the transition to entrepreneurship. However, many studies find that firm size is a poor proxy of work organization and, therefore, calls for empirical research exploring the link between specific measures of work organization and the transition to entrepreneurship. We create a measure of work organization from survey data—ranging from bureaucracy to adhocracy. We then combine this with longitudinal matched employer–employee register data and investigate different types of entrepreneurial transitions for individuals triggered by a mass worker displacement event. We find that work organization significantly affects several measures of transition, with possible implications for the policies and institutional settings that condition firms’ organization of work.

Suggested Citation

  • Jacob Rubæk Holm & Kristian Nielsen & Bram Timmermans, 2025. "Bureaucracy, work organization, and the transition to entrepreneurship," Small Business Economics, Springer, vol. 64(4), pages 2179-2195, April.
  • Handle: RePEc:kap:sbusec:v:64:y:2025:i:4:d:10.1007_s11187-024-00979-z
    DOI: 10.1007/s11187-024-00979-z
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    More about this item

    Keywords

    Entrepreneurship; Occupational choice; Bureaucracy; Work organization; Worker displacement;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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