The Value of Workplace Peers for Entrepreneurship
Do peers impact transitions to entrepreneurship? Peers might socially influence others, and/or they may convey valuable information about how to become a successful entrepreneurs. Using a large register of seven cohorts of all private sector employees in an economy we find the fraction of time peers have spent in prior entrepreneurship correlate with transitions from employment to entrepreneurship, as previously shown. However, when instrumenting peer exposure with the unexpected death of workplace peers, the correlation disappears. OLS regressions estimate a small 1.2% increase between prior wage and entrepreneurial earnings with a one standard deviation increase in peer entrepreneurship intensity, while IV regressions estimate an insignificant difference. Results suggest that entrepreneurial workplace peers may not socially influence their co-workers to become entrepreneurs, and do not provide information which can be profitably used in entrepreneurship. All prior OLS correlations may be due to selection.