Does Individual Performance Affect Entrepreneurial Mobility? Empirical Evidence from the Financial Analysis Market

Boris  Groysberg; Ashish   Nanda; M. Julia Prats

Journal Article | Journal of Financial Transformation | March 2009

Does Individual Performance Affect Entrepreneurial Mobility? Empirical Evidence from the Financial Analysis Market

by Boris Groysberg, Ashish Nanda and M. Julia Prats

Abstract

Our paper contributes to the studies on the relationship between workers' human capital and their decision to become self-employed as well as their probability to survive as entrepreneurs. Analysis from a panel data set of research analysts in investment banks over 1988-1996 reveals that star analysts are more likely than non-star analysts to become entrepreneurs. Furthermore, we find that ventures started by star analysts have a higher probability of survival than ventures established by non-star analysts. Extending traditional theories of entrepreneurship and labor mobility, our results also suggest that drivers of turnover vary by destination: (a) turnover to entrepreneurship and (b) other turnover. In contrast to turnover to entrepreneurship, star analysts are less likely to move to other firms than non-star analysts.

Keywords: Entrepreneurship; Investment Banking; Retention; Human Capital; Performance Effectiveness; Banking Industry;

Format: Print

12 pages

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Citation:

Groysberg, Boris, Ashish Nanda, and M. Julia Prats. "Does Individual Performance Affect Entrepreneurial Mobility? Empirical Evidence from the Financial Analysis Market." Journal of Financial Transformation 25 (March 2009): 95–106.

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Does Individual Performance Affect Entrepreneurial Mobility? Empirical Evidence from the Financial Analysis Market

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