Employer Size and Transition to Entrepreneurship: Variations According to Organizational Position

Although transition to entrepreneurship is a central subject in entrepreneurial studies, there is little research on its link with previous employer firm size. This study examines this relationship by utilizing a rich data set representing the entire Taiwanese labor market. While we found that smaller firms produce more entrepreneurs for all employees, the transitional probabilities of middle managers are higher in larger firms, indicating a specific firm size effect caused by organizational characteristics associated with position. In larger firms, the wide range of information that middle managers process facilitates entrepreneurial discoveries, and intense competition for senior management positions lowers opportunity costs.