Electronic copy available at: http://ssrn.com/abstract=2207553

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FLEXIBILITY IN PRIOR WORK INSTITUTIONS AND ENTREPRENEURSHIP:

EVIDENCE FROM CHINA

Delin Yang, Charles Eesley, Xinyi Yang

Abstract We bring together work on institutional theory and entrepreneurship. Prior work has largely relied on institutional change to explain entrepreneurial activity. Instead, we show how the movement of individuals during their career paths across multiple organization types (i.e. multiple institutional logics) enables entrepreneurial behavior through questioning taken-for-granted assumptions, facilitating the discovery of entrepreneurial ideas. This paper contributes to theory by providing a framework for the impact of work experience in organizations with different institutional logics on entrepreneurship. We found that individuals with work experience in multiple types of organizations are more likely to enter entrepreneurship. Our study shows the positive link between work experience in multiple organization types and entrepreneurship and points out important implications.

Existing institutional theory typically emphasizes stability, rigidity, and the effects of

something becoming standardized, taken-for-granted, or institutionalized. Our contribution is

to build and test a theoretical framework for how work experience spanning organizations

with different institutional logics fosters the discovery and pursuit of entrepreneurial

opportunities. Action is viewed as constrained by institutional contexts, particularly new and

creative actions, due to the rules they enact which become taken-for-granted by individuals in

that context. North (1990) states that, The major role of institutions in a society is to reduce

uncertainty by establishing a stable (but not necessarily efficient) structure to human

interaction. Yet, in focusing on the stable impact of institutions in shaping behavior,

institutional theory has had correspondingly less to say than it could about how change and

entrepreneurial behavior emerges. The question of how the institutional environment affects

Electronic copy available at: http://ssrn.com/abstract=2207553

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individual entrepreneurial behavior is not well understood. The contribution of this paper is to

theorize a novel mechanism by which individuals discover and pursue new entrepreneurial

opportunities as a result of moving across organizations with differing institutional logics.

The role of entrepreneurship in job creation and economic growth has made the

relationship between institutions and entrepreneurship of interest around the world

(Hoskisson et al. 2000). Yet the effectiveness of such regulatory reforms and institutional

changes is still unclear. Prior work suggests that rather than more rigidly enforced,

transparent and formal regulations, more flexible institutions may enable innovation and

entrepreneurship (Yang, Eesley, Tian & Roberts, 2012; Sutton and Dobbin 1996). Indeed,

factors including the dominance by large business groups, strong family ties, and cultural

norms to avoid risk and fit in suggest that such institutional changes may have limited

influence in many countries (Chacar & Vissa, 2005; Rajagopalan & Zhang, 2008).

Sustainable increases in entrepreneurship would require constant institutional change, which

is impractical from a societal viewpoint. We explore the possibility that flexibility could be

embedded in the individual rather than as aspect of the institutional environment.

We contribute to research at the intersection of institutions and entrepreneurship. Our

primary contribution is to show why it is that individuals who move across institutional logics

and sectors during their careers can also have a higher propensity for entrepreneurship. While

we know that regulatory institutional changes and flexibility encourages entrepreneurship, we

have relatively less understanding of why some individuals become entrepreneurs if the

institutional environment remains stable. Prior scholarship on the effects of the institutional

environment on entrepreneurship focuses on the influence of institutional change or new

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institutional logics (Sine and David, 2003; Rao, Monin, and Durand, 2003). Prior studies on

work experience focus on the characteristics of the prior employer or role, typically within a

single organization type. An open question is whether the environment must change to

generate entrepreneurial behavior or if it is sufficient for individuals to move across

environments. These streams of literature in institutional theory have advanced our

understanding of how institutional theory might explain emergence, but they leave an

important gap that we seek to address. Are individuals more entrepreneurial when their

careers span a variety of institutional contexts and logics?

We address this gap by asking the following question: how does working in multiple

organization types with multiple institutional logics affect an individuals likelihood of

entrepreneurship? Institutional logics are conceptualized as cultural beliefs and rules

influencing the cognitions and behaviors of actors (Thornton, 2004; Lounsbury, 2007).

Logics are shared assumptions and values that form a framework for reasoning and help

provide criteria for legitimacy (Thornton, 2004). Scholars conceptualize logics as rooted in

societal sectors, such as academic, government, the non-profit sector or industry (DiMaggio

and Powell, 1983). The setting of our study is China. To answer the research question, we

examine how work experience spanning different types of organizations representing distinct

institutional logics (government, academia, non-profit, and business sectors) impacts the

propensity for individuals to become entrepreneurs. We find an increase in entrepreneurial

behavior associated with individuals who have careers spanning different institutional

environments. This increase comes primarily from an increased likelihood of finding

entrepreneurial ideas during work experience among those with non-management degrees.

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Background Literature and Hypotheses

There are two streams of research that are relevant institutions and entrepreneurship.

Institutional theory, in emphasizing that over time behaviors and norms become legitimated

into rules and regulations and further taken-for-granted and habitualized, leaves a puzzle in

how to explain examples around us of institutional change, disruption and emergence?

Examples of institutions constraining choices have been shown in educational publishing,

grievance procedures and in science (Thornton 2002, Edelman et al. 1999, Colyvas and

Powell 2006). While institutions are typically associated with habituation and rigidity,

institutions occasionally also foster entrepreneurship, particularly when the reduce

uncertainty, provide legitimacy or reduce regulatory barriers to entry (Sine et al. 2005). This

line of research finds that changes to the regulatory institutional environment increase the

founding of new firms by altering the barriers to entry. Examples of institutional change

encouraging entrepreneurship are frequently situated in particular cases following

institutional change that made regulatory changes to an industry (Sine et al. 2005) or

provided legitimacy to a new organizational form (Hiatt et al. 2009, Lounsbury and Glynn

2001, Sine and Lee 2009, Dobbin and Dowd 1997).

Institutions have been described as shared mental models (North 1990),

taken-for-granted understandings (Berger and Luckmann 1967), logics (Thornton 2002) or as

rules of the game (Powell and DiMaggio 1991).1 Most social scientists assume that a key

aspect is that they are relatively stable (e.g., Meyer and Rowan 1977, Powell 1991). Weber

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !1 We find it useful to draw on scholarship embodying both a more functional view of institutions (North 1990) along with sociological perspectives from neo-institutional theory in developing our theory and hypotheses (Meyer and Rowan 1977, Powell 1991). However, it is not our goal to explicitly combine these perspectives. Rather we see important ways they can inform one another, particularly for drawing insights from the sociological perspective that may help guide the design of formal, functional institutions.

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(1968) emphasized the stability and rigidity that bureaucratization and institutionalization can

bring and the difficulty of changing organizations as a result. Institutions constrain behavior

by delineating the set of interpretations and actions available (DiMaggio 1997, Hargadon and

Douglas 2001). Individual behaviors are constricted as details in the environment invoke

scripts for action and schemas for understanding (Hargadon and Douglas 2001).

Institutional research has brought to light the importance and ubiquitous nature of

standards, norms and rules in society (Brunsson and Jacobsson 2000). Yet, institutions are not

uniform across all of society. Different regions, sectors, organizations or industries can each

have elements that are specific to their institutional environments even if they share

national-level institutions. In the case of art museums, institutions in the form of government

regulations and funding, trade associations and personal networks among professionals

shaped and constrained the organizational form of the U.S. art museum (DiMaggio 1991).

While it enables us to understand better how the broader institutional environment influences

actors in society, the focus of this stream of literature has resulted in relatively less theoretical

insight into questions of emergence and entrepreneurship (Hwang and Powell 2005).

A central finding of institutional theory is that new organizations prosper when they

are congruent with their institutional environment (Meyer and Rowan 1977). Institutional

theory has shown that by through standardized regulations and social norms, society

increases the legitimacy of new organizational forms helping to foster entrepreneurship

(Tucker et al. 1990, Dobbin and Dowd 1997; Meyer and Rowan 1977). For example, Sine et

al. (2005) find that the presence of social movement organizations predicts more supportive

regulatory policies towards renewable energy and both of these factors are positively related

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to the level of entrepreneurial activity among renewable energy producers following the

passage of the Public Utilities Regulatory Policies Act (PURPA) in 1978.

Organizational populations also must be aligned with the expectations of the

institutional environment because if they are not consistent with regulations or widely shared

values then they will be viewed critically (Hunt and Aldrich 1998; Sine et al. 2005).

Therefore, changes in institutions have been found to lead to increased entrepreneurial

opportunity as the old, misaligned population loses resources and a new population of firms

rises to take its place (Hiatt et al. 2009). For example, Hiatt, et al. shows the decline of

alcohol producers and rise of soft drink firms with the social movement leading to Prohibition

in the United States. In another example, many universities allowed more flexibility by

embracing institutions and practices from the commercial sphere, generating more

entrepreneurship, especially in biotechnology (Owen-Smith and Powell 2001). However, the

implication is that after institutional change, there will be a period of entrepreneurship as a

new population of organizations better aligned with the new institutional environment

emerges. Yet further entrepreneurial behavior requires another institutional change. To create

an institutional environment with more sustained levels of entrepreneurship would require

continuous institutional changes.

Institutional theorists typically view standardization as benefiting organizations since

clear rules reduce uncertainty and make it easier for internal and external constituents to

provide resources (Lounsbury and Glynn 2001). For example, after 1983, Medicare went

from a cost-based reimbursement methodology to a per-case reimbursement procedure. The

standardization of reimbursement made the market more predictable and new companies

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moved into the health care field (Scott et al. 2000). There is a theoretical puzzle regarding

how and why individual entrepreneurial behavior occurs when institutions are relatively

stable. More flexible institutions foster entrepreneurship in allowing choice in how to meet

goals (Yang, Eesley, Tian & Roberts, 2012). We build on this work by theorizing that

institutional flexibility can become embedded within individuals as they work in different

contexts and become exposed to multiple, at times conflicting institutional logics. We argue

that rather than institutions changing, individuals can become more entrepreneurial as a result

of career moves across different institutional logics even if institutions remain constant.

Career Experience and Entrepreneurship

Second, research in entrepreneurship specifically points to the importance of an

individuals career history on entrepreneurial behavior (Beckman, 2006). In contrast to the

early focus of institutional theory, entrepreneurship is associated with individual autonomy,

seeing agency in individuals breaking free from habits and traditional ways of doing things

(Meyer and Jepperson 2000). However, in focusing on individuals, this literature has not

typically considered the role of the institutional context in which those individuals are

embedded. Using data from well-developed economies, scholars have shown that

entrepreneurs are more likely to have certain characteristics (Srensen 2007; Roberts 1991).

A rapidly growing stream within this literature examines the link between career

experience and entry into entrepreneurship (Boeker, 1989; Haveman, 1993; Haveman and

Cohen, 1994; Phillips, 2002; Beckman, Burton and OReilly, 2007). Those with more work

experience, a variety of job titles (Lazear 2005), those in lower status occupations,

immigrants, and the unemployed have been found to become entrepreneurs at higher rates

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(Hsu et al. 2007, Evans and Leighton 1989). Others have looked at the role of parent firms,

finding that individuals who work for firms that historically produced more spin-offs and are

VC-backed ventures are more likely to become entrepreneurs (Burton, Srensen and

Beckman, 2002; Gompers, Lerner and Scharfstein, 2005; Srensen, 2007). Individuals in

certain types of job roles and in certain contexts are also more likely to found their own firms

(Dobrev and Barnett, 2005). For instance, Saxenian (1994) explains the entrepreneurial

culture of Silicon Valley by a culture where job hopping, rather than climbing the corporate

ladder. Yet, this literature often implicitly assumes that entrepreneurs had worked in industry

previously (Klepper, 2007). It has not explored how experience in a variety of institutional

logics as a result of working in multiple sectors influences entrepreneurship.

Institutional Flexibility and Entrepreneurship!

In certain cases, new institutions emerge. In the case of French gastronomy,

established orders declined and new institutional logics and identities emerged to replace

them (Rao, Monin, and Durand, 2003). For instance, nouvelle cuisine arose in contrast to 19th

century French cuisine (Rao et al., 2003: 798). More often institutions are transferred from

one domain to a new domain. Innovation and entrepreneurship often entails recombination of

existing parts (Powell and Sandholtz, 2012; Owen-Smith and Powell, 2001).

The existing institutions do not immediately disappear when new institutions enter a

domain. One way that institutions result in organizational change is when there are multiple

strong and heterogeneous institutional forces operating on an individual at the same time.

Multiple, heterogeneous institutions allow individuals to recognize taken for granted

assumptions, to recombine institutional logics and practices as well as the choice and

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flexibility over which set of institutional norms and rules to follow. As an example, in the

rural hospital sector of the US, a combination of heterogeneous institutions resulted in

innovation and organizational change (D'Aunno, Succi, Alexander, 2000).

Working within a single institutional context exposes an individual to one worldview,

one set of mental models for understanding and interpreting appropriate actions and one set

of taken-for-granted assumptions. For example, the academic institutional logic is one where

the goals that are valued are knowledge, learning, advancing the frontier of knowledge

through research and publication and certain behaviors are deemed appropriate while others

are not (for example commercial activities).

When an individual switches to a different type of organization, for instance, a

government position, a different set of taken-for-granted assumptions and a new institutional

logic replaces the old academic one. There is likely to be a period of adjustment, as an

individual has to question previous assumptions, learns to accept new types of behaviors and

adopts new goals and values. Working in multiple institutional contexts and logics aids an

individual in going through the process multiple times of questioning previously

taken-for-granted assumptions, seeing the world through different mental models, and

learning a new set of logics and norms. This is helpful for entrepreneurship because these are

the same skills in recognizing and pursuing new opportunities (Dyer, Christensen, etc., 2008).

Prior work supports this idea in showing that as students are exposed to more varied

coursework, it increases entrepreneurship by allowing them exposure to multiple ways of

thinking about the world and questioning assumptions inherent in other fields. Working in

multiple institutional logics also provides an individual with multiple types of networks and a

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greater likelihood for structural holes, increasing the likelihood of entrepreneurship (Burt,

1995). An individual might get a relatively broader network and variety of skills by working

in different job roles (Lazear, 2005). Yet, one important aspect is missing, which experience

moving across institutional logics and sectors provides. This is the experience with

frame-breaking behaviors, questioning taken-for-granted assumptions and divergent thinking

essential to entrepreneurship.!

Previous institutional theory has proposed that with institutional changes we see more

entrepreneurship because a new institution has developed or has been transferred to a new

domain (Rao, Monin, and Durand, 2003). Yet, we propose a novel alternative story that prior

work has not explored systematically, the idea that increases in entrepreneurship result when

individuals carry multiple institutional logics with them across their careers, becoming more

entrepreneurial with the variety of logics they are exposed to and the flexibility in behaviors

and assumptions that results. Everyone has experienced entering a new work setting, or

traveling to a new country and seeing long-held assumptions about the way things are done

questioned. A similar process occurs for anyone who has switched among types of work from

the private sector to government or academia. We propose that such change in work type aids

individuals in discovering and pursuing entrepreneurial opportunities because it provides the

individual with experience in institutional flexibility. Moving across institutional logics is

associated with questioning assumptions, frame-breaking behaviors and divergent thinking.

Prior literature shows that habitualization results from staying within the same work type and

institutional logic. To break this pattern of habilitualization and enable processes of change

and emergence, either the environment must change or as we propose, the individual can

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break free of institutionalization processes by moving across institutional logics.!

When new institutions are created or transferred, new entrepreneurial opportunities

temporarily open up (Rao et al. 2003). Similarly, when institutions are transposed or when a

domain has multiple, heterogeneous institutions, for a window of time, individuals have a

choice in which set of rules and norms to follow. Not everyone will follow the new

institutions immediately, creating opportunities and flexibility for individuals to act in new

ways. The reason why having new institutions emerge or having multiple competing

institutions might foster entrepreneurial behavior is the flexibility and choice that these

environments afford individuals. However, multiple, heterogeneous institutions do not need

to coexist in the same context if they are embodied within individuals who have experience

working in multiple, heterogeneous institutional settings.

Flexibility in Institutional Logics Due to Work Experience

When institutions change, individuals view their choices differently and they respond

by changing their behaviors. However, we do not yet know whether similar increases in

entrepreneurial behavior occur when individuals move across different organization types

that have different institutional logics. In this case, from the point of view of the individual

moving across institutional environments, there has been a change in their personal

institutions that impact their work, causing them to question prior assumptions.

Rigid, inflexible institutions may imprint individuals well to think within a prescribed

way, to have common assumptions, skills and beliefs, to follow rules and to be good

employees. However, exposure to multiple, diverse institutions better trains individuals to

think for themselves and may be better for finding and pursuing new opportunities.

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In previous work, scholars explored flexibility in university institutions (Yang, Eesley,

Tian & Roberts, 2012). When students are only exposed to a more narrow set of curriculum

within a single paradigm (i.e., a major in computer science), then it can be argued that certain

taken-for-granted routines develop. These routines are beneficial in many ways as they save

time and effort, create a background of routine that allows for innovations, which demand a

higher level of attention, (Berger and Luckmann 1967, p.57).

However, for encouraging the discovery and pursuit of entrepreneurial opportunities,

a more flexible training experience may be preferable. Working within a narrow work type

and institutional logic develops procedures, norms, rules, beliefs and taken-for-granted

assumptions. As individuals are exposed to a variety of institutional logics across different

types of organizations, they are better able to question the assumptions embedded in their

previous education or work experience. They become exposed to alternative, divergent ways

of thinking about problems. March (1991) argues that members of an organization become

socialized to the organizational code. Similarly, individuals freed from a single type of

employment experience may gain entrepreneurial intentions as they see ways to question

previously hidden assumptions. For example, the research biologist who has an opportunity

to work in the government agency charged with new drug approvals and considers ways of

questioning assumptions about how to design clinical trials may wish to try out these new

ideas. Individuals may feel empowered to challenge the status quo as they are exposed to

others that hold a different set of assumptions and challenge ways of thinking developed in

other organization types. Some will then have entrepreneurial intentions to develop these

ideas further. When multiple, heterogeneous institutional forces coexist, recombining

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behaviors or practices in novel ways become an ever-present possibility.

Work experience spanning multiple organization types and logics can increase

entrepreneurial intentions and activity via three related roles of institutions status markers,

cultural carriers and enablers of professions. Institutions can act as status markers (Lounsbury

and Crumley 2007). When individuals work within a single type of organization, they receive

signals from only that one discipline and one institutional framework about what constitutes

status in that world. As a result, they develop career intentions and plans within that

traditional, disciplinary framework. For example, once students are confronted with multiple

institutions in a variety of sectors, then they may be likely to see that there are many criteria

and alternative options for status markers. They begin to see examples of those who have

combined insights across fields to gain recognition and status. Individuals can see that status

comes not only from within a single, narrow paradigm, permitting them to have

non-traditional career intentions outside of that domain.

Finding entrepreneurial opportunities often requires questioning assumptions others

have taken for granted and seeing problems from new perspectives. Exposure to multiple

institutional logics can broaden an individuals horizons, generate innovative, divergent, or

paradigm-challenging ideas, and contribute to entrepreneurial intentions. Different types of

organizations are more likely to help a person to accumulate social resources and exposure to

multiple institutional logics that is beneficial for entrepreneurial activities. Thus we propose:

Hypothesis 1a: Work experience in multiple types of organizations is positively

related to entrepreneurial intentions.

Intention has been shown to be a good predictor of actions (Ajzen 1991; Bagozzi et al.

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1989), albeit many other intervening factors are also at play. However, to go from

entrepreneurial intention to actual entrepreneurial activity, non-motivational factors must be

considered (Shepherd and Krueger 2002), including entrepreneurial opportunities, the ability

to identify entrepreneurial opportunities (Baron and Ensley 2006) and skills (Roberts 1991).

In a related way, institutions act as carriers of culture (DiMaggio 1991). For the

individual who works within a single institutional logic (i.e., only in academia), the culture

that gets imparted to the individual is a single way of thinking about problems, a unified set

of skills, and a single set of values as well as assumptions about how the world operates.

Such circumstances make it more challenging to see opportunities that others have missed.

When individuals move across institutional logics, they are exposed to multiple sets

of assumptions and ways of interacting with society. As a result, they start to pick up not only

more variety in skills and networks, but also ways of thinking and questioning. Work

experience across institutions increases entrepreneurial behavior by exposing individuals to

multiple cultures and allowing them to choose among or recombine them and follow the

cultural rules that align with their ambitions and interests. Work experience across

institutional logics via different organization types is a very unique type of work experience

that allows the recombination of ideas from different sectors in unique ways. This

questioning and recombination of ideas that others would not typically see together enables

new entrepreneurial ideas and ventures to emerge. In this way, flexibility is embedded in the

individual rather than the institutional environment (Yang, Eesley, Tian and Roberts, 2012).

Institutions act as constraints and enablers of professions (Thornton 2002).

Institutional change can allow actors to make new types of status claims and can enable new

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professions (Lounsbury 2002). Working across different types of institutional logics reduces

constraints on the entrepreneurial profession and enables it through building relevant

opportunity recognition capabilities and skills. Many of todays professions exist at the

intersection of institutional logics. For instance biotechnology sits at the intersection of

academic science and industry. Work experience across institutional contexts enables

professions that require or are aided by the combination of different sectors. Such professions

include entrepreneurship along with other creative endeavors where multiple perspectives and

diverse experiences, skills, and contacts are essential to the profession.

Finally, work experience across institutional logics is an important enabler of

entrepreneurial careers due to its role in developing entrepreneurial ideas and ability.

Individuals who switch across organization types or sectors are free to accumulate networks

and acquire knowledge that they consider to be relevant to their future entrepreneurial

activities. This flexibility contributes to improving their balance of skills (Lazear 2005) and

the practice in questioning assumptions and divergent thinking increases the probability of

their actual entrepreneurial activity (Eesley and Roberts, 2012; Markman and Baron 2003). In

addition, individuals must undertake career planning rather than following an established

promotion trajectory within one organization, and these actions positively impact on an

individuals independent decision-making abilities. These factors are conducive for

development of an individuals entrepreneurial knowledge and skills, thereby increasing the

probability of actual entrepreneurial activity amongst alumni. Thus, we propose:

Hypothesis 1.b: Work experience in multiple types of organizations is positively

related to entrepreneurial action.

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One interpretation of the hypotheses above is that it is simply experience in other

institutional logics and settings that leads to creative new business ideas. Yet, experience in

other institutional logics combined with experience in industry leads to a greater likelihood of

entrepreneurship. Without prior experience in the business context, it is significantly less

likely that an individual will have (and pursue) an idea for starting an entrepreneurial

business firm. Experience in a business context provides the individual not only with the

social capital to effectively create an entrepreneurial firm, but also with the institutional logic

of the business context, that commercializing ideas and selling a new product or service is an

appropriate and taken-for-granted way of acting in society. Combining such experience with

work experience in another sector can lead to a greater likelihood of questioning basic

assumptions and coming up with creative, new ideas for an entrepreneurial firm.

Individuals with only experience in government or academia may generate many

ideas that would be novel and relevant to a business setting, but it would not occur to them to

form a new firm and sell these as products or services themselves without some work

experience in industry. If conforming with accepted institutional norms and behaviors is the

most important aspect for entrepreneurial behavior, then we would expect that individuals

who have work experience in industry and in that institutional logic to more likely to become

entrepreneurs. Different types of organizations have varying influencing effects on their

members. This could be due to the influence of an organization on its employees ability and

vision, which thus affects the employees likelihood of entrepreneurship. Within the industry

sector, it is known that some organizations and paths through work experiences are hotbeds

of entrepreneurship, while others contribute little (Gompers, Lerner and Scharfstein, 2005).

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Taking this a step further, we suggest that if ones prior organizations are similar in

institutional logic to the new venture, her experiences are more likely to be relevant to her

entrepreneurial path. The social network developed from similar types of organization can be

more helpful, because his previous ties are in the same business circles, thereby increasing

the possibility of acquiring information and resources. Also, having experience in similar

types of organizations enhances the ability to identify business opportunities.

Hypothesis 2: Work experience in a similar type of organizations is positively related to

her entrepreneurial action.

Experience in multiple organization types causes individuals to question

taken-for-granted assumptions, see things in new ways and meeting new people, which opens

them up to generating new ideas and seeing new entrepreneurial opportunities. Coming

across a new entrepreneurial idea can result from many settings. It could come up while

doing a hobby, in conversation in a social setting with friends, or simply daydreaming on a

hike or in the shower. Other ideas come to an individual during the course of work

experience. If the mechanisms described above are true, then we should expect that work

experience spanning institutional logics should lead to a greater likelihood of pursuing an

entrepreneurial idea that the individual had during work experience. We theorize that it is the

experience of working in a new institutional environment that opens an individual's mindset

to questioning old assumptions from prior institutional logics and seeing new connections

from disparate ideas or fields in new ways. If this is what is occurring in these individuals

then they should be getting these new ideas while at work, rather than in other social

situations that do not change when an individual shifts jobs.

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Hypothesis 3a: Work experience in multiple types of organizations is positively

related to discovering entrepreneurial ideas from work experience.

Moving jobs across institutional logics should have a greater impact on individuals

without management education. Those with non-management degrees are not pre-disposed to

thinking in business terms or to thinking about entrepreneurship. Management education by

its nature exposes individuals to various institutional logics as you encounter cases and fellow

students from very diverse backgrounds and work experiences. Management education tends

to explicitly get students to question assumptions and think of innovative, entrepreneurial

ideas and how to execute them.

For the MBAs, you would expect that they already are exposed to the idea of

entrepreneurship. Given their education, they're already pre-disposed towards this way of

thinking. They've also been exposed to multiple ways of thinking already since many would

not have studied business as an undergraduate. However, for the non-management majors,

their education did not necessarily expose them to entrepreneurship or the idea of coming up

with business ideas and they are not a population that is pre-disposed towards

entrepreneurship. Thus we should expect that experience in multiple organization types has a

stronger effect on this group because it causes them to start to question assumptions, meet

people who act and see things differently, learn a new set of logics and norms in the new

organization type. This has a bigger effect on these non-management majors and makes them

more likely to find new ideas and to try their hand at an entrepreneurial opportunity relative

to those who had non-management majors but only worked in a single organization type.

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Those with more technical or non-management degrees, such as those in engineering,

sciences or the humanities, do not have any training or pre-disposition towards

entrepreneurial ideas. It is easy for such individuals to remain within one framework of

thinking about the world (for example, an electrical engineer who pursues a specialized and

thus narrow set of coursework and then does similar work in academia or in industry). It is

these individuals for whom work experience that spans institutional logics will make more of

a difference. For these individuals, the effect produced by exposure to different institutional

logics in causing them to question what the standard or normal ways of getting things done

are and in questioning taken-for-granted assumptions about how the world works is more

significant in their lives. Thus, we expect to see a stronger effect of multiple organization

types on the likelihood of entrepreneurship and in coming up with ideas from work

experience for this sub-group. This is a closer test of our mechanism that work experience

spanning institutional logics facilitates the discovery of new ideas for entrepreneurial firms.

Hypothesis 3b: Work experience in multiple types of organizations is positively

related to entrepreneurship, particularly for individuals with non-management degrees.

Methodology

Background and Historical Context. We test these hypotheses within the setting of

institutional changes in China. Entrepreneurship had been all but eliminated after Mao

Zedong and the Chinese Communist Party founded the Peoples Republic of China in 1949.

In 1978, Deng Xiaoping launched the Four Modernizations reform program to deal with the

economic crisis after the Cultural Revolution by stimulating economic growth (Gregory,

Tenev, & Wagle, 2000).2 It allowed small-scale entrepreneurship by mixing in market-based

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!! !2 See Young (1995) for a comprehensive background on private business and economic reform in

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logic, yet this emphasis resulted in strong discrimination against domestic entrepreneurs in

favor of foreign-invested and state-owned firms in China (Huang 2003, 2008).

Flexibility and mixing institutional logics was historically an integral part of the

re-emergence of entrepreneurship in China. In 1979, commune and brigade enterprises (now

referred to as township and village enterprises) were allowed to enter non-agricultural

industries. These enterprises were at the intersection of public and private. They were under

the purview of local governments but were also market-oriented and privately managed. They

were organizations where the government and private market institutional logics came

together. The State Council permitted these activities under the Regulation on Some

Questions Concerning the Development of Enterprises Run by Peoples Communes and

Production Brigades (Wong, 1988). These enterprises were sometimes collectively owned

by local governments but primarily had entrepreneurial incentives for their managers who

were free to react to prices and choose product lines (Liao and Sohman, 2001).

In 1988, the state officially recognized the growing number of private businesses with

eight or more employees. The Peoples Congress approved Article 11 of the 1988 amendment

to the Constitution of the Peoples Republic of China, which permits the private sector of the

economy to exist and develop within the limits prescribed by law. In 2001, President Jiang

Zemin announced that the Chinese Communist Party (CCP) should recruit private

entrepreneurs. This made it more legitimate for entrepreneurs to join the government and for

Party members to become entrepreneurs and allowed entrepreneurs and their firms greater

connections to government resources and movement across sectors.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! !!!!!!!!!!!!!!!!!!!!!!!!!!!! !China from 1978 to the mid-1990s.

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Sample. To study the relationship between institutional flexibility embedded in

individual careers and entrepreneurship, we conducted a survey of alumni who graduated

from Tsinghua University between 1930 and 2007. The Chinese context is particularly

advantageous for testing these ideas because it is a unique setting where there is greater

variation in the levels of individual careers across different work types. In the earlier decades,

individual careers were largely determined earlier on and transition to a new type of work

was severely restricted. Yet with economic transition, the private sector emerged and new

types of organizations containing new institutional logics emerged enabling greater variation

in organization types. The data used for this paper was taken from the 2007 Tsinghua Alumni

Entrepreneurship Survey. In June of 2007, we distributed questionnaires through the

Tsinghua Alumni Association to nearly 30,000 alumni who graduated between 1930 and

2007. We received a total of 3,646 questionnaire responses, with a total response rate of 12%.

Among all the responses, 1,620 were sent out via the Internet and 2,026 via postal mail. To

test whether the respondents to the survey were representative of the broader population of

Tsinghua graduates, we compared the survey responses to overall data on graduates from

Tsinghua University. The results are shown in Table 1.

--------------------------------- Insert Table 1 about here

---------------------------------

To further assess non-response bias, we performed a test using the extrapolation

procedure (Armstrong and Overton, 1977). This method relies on the assumption that

non-respondents share similar characteristics with responders who were late in submitting

their responses. Under this method, the survey was split into two parts on the basis of survey

return dates: the first 90 percent of the respondents and the last 10 percent of the respondents.

!! 22!

The test examined mean characteristics of the two types of respondents to investigate whether

there were any differences between non-respondents and respondents. T-tests of the null

hypothesis that the average (observed) characteristics of the responders and non-responders

were found to be statistically similar. The respondents who are sorted by graduation years

were also checked and were found to be similar. These results offer reassurance that there

were no systematic biases in respondents to the survey.

The earliest observable entrepreneurial activities in China occurred in 1982, after the

start of Chinas economic reform and open policy. Since that time, a large number of alumni

from various graduation years have become entrepreneurs. (Figure 1)

--------------------------------- Insert Figure 1 about here

---------------------------------

Our questionnaire investigated the work experience of an alumnus before he was

involved in new business ventures, and therefore we eliminated the reverse causality that

prior entrepreneurial activities may cause a change of work experience.

Model

The samples collected were divided into the following three subsamples: (i) alumni with

entrepreneurial activities, (ii) alumni without entrepreneurial activities but have

entrepreneurial intentions, and (iii) alumni with neither entrepreneurial intention nor activities.

The descriptive statistical analysis of the three subsamples is shown in Table 2.

--------------------------------- Insert Table 2 about here

---------------------------------

Dependent variables

Entrepreneurial Intentions. We wanted to examine the relationship between work

!! 23!

experience in different types of organizations and entrepreneurial intentions. Entrepreneurial

intentions of people who have already started their businesses cannot be measured simply

through self-reported answers to questions such as do you plan to start a new firm in the

future. Therefore, for this aspect, we abandoned the subsample of entrepreneurial alumni and

studied the alumni without entrepreneurial activities. If the respondent indicated that he

planned to be an entrepreneur in the future, he was regarded as having entrepreneurial

intentions and assigned the value 1; otherwise, a dummy variable of 0 was assigned.

Entrepreneurial activities. We took entrepreneurial activities to be a dependent variable.

We defined entrepreneurial activities as starting new firms, buying firms or owning

enterprises through privatization. If the respondent indicated that he had participated in any

one of these activities in the past, he was regarded as having undertaken entrepreneurial

activities and was assigned the value 1; otherwise, 0 was assigned.

Explanatory variables. We divided organizations into four types: enterprises,

governmental organizations, academic organizations and NGOs. There are various ways to

classify organizations. We chose to categorize organizations into four groups according to

their purpose: enterprises, governmental organizations academic organizations and

Non-Government Organizations (NGOs). Enterprises pursue profits, regardless of the type of

ownership structure. Governments, including central and local ones, provide public services,

promote social development and implement fair distribution amongst different segments of

society. Academic organizations produce knowledge and nurture talents. NGOs increase the

welfare of the society. We believe that organizations different purposes make a difference in

their daily affairs, thus affecting the work experience of individuals within the organizations.

!! 24!

In Models 1 and 2, we examined the relationship between work experience in different

types of organizations and entrepreneurial intentions (M1-1, M1-2), as well as the

relationship between experience and entrepreneurial activities (M2-1, M2-2, M2-3). If the

respondent had worked in two or more types of organizations, we regarded him as having

work experience in multiple types of organizations and assigned her a dummy variable of 1.

Otherwise, a dummy variable of 0 was assigned. The reason that we adopt a dummy variable

instead of a continuous one is that although work experience in multiple types of

organizations can reflect the diversity of institutional logics, work experience in every extra

(marginal) type of organization may not have the same effect.

In Model 3 (M3-1, M3-2, M3-3), we examined the relationship between organization of

each type of experience and entrepreneurial activities. If the respondent had worked in an

enterprise, the dummy variable Industry = 1, and 0 otherwise. We took the same approach for

variables of other types of organizations. If the respondent worked in the two or more types

of organizations, then the corresponding dummy variables were all marked as 1.

We asked entrepreneurs the source of their entrepreneurial idea for new products or

services. For those who answer that they had the idea from work experience in government,

we coded it as 1. We coded respondents with an MBA degree, including EMBA and

International MBA degree as well as management science, Management & Economics,

Enterprise Management, Management, Technology & Economics, and HR & Organization in

undergraduate or graduate programs. We created the Non-management-degree variable by

coding people with management-related degree as a 0 and the rest as a 1.

Control Variables. Prior empirical research indicates that entrepreneurship is influenced

!! 25!

by many factors, including personal background, financial capital, human capital and

surroundings. Therefore, we adopted these variables as control variables. A series of studies

has shown that age is an important factor when a person makes entrepreneurial decision

(Levesque and Minniti, 2006; Roberts, 1991), and thus we took age to be a control variable

(2007 minus the respondents birth year). Gender is also an important variable affecting

entrepreneurship (Evans and Leighton, 1989), so we took it as a control variable. Males were

assigned to 1 while females were assigned to 0.

Previous studies have shown that the property status of individuals and families affects

entrepreneurship (Nanda, 2008; Evans, 1989), and therefore we held the level of personal

income as a control variable. In the questionnaire, we asked about the annual income of each

of the alumnus past jobs (not including being an entrepreneur). The income level was then

divided into six categories, from less than CNY 20,000, CNY 20,000-CNY 50,000, CNY

50,000 - CNY 100,000, CNY 100,000 - CNY 150,000, CNY 150,000 to CNY 200,000 to

more than CNY200,000. We classified them as Levels 1-6 and used an individuals highest

level as the measure of personal income. We found the median level to be 2.75 and mode to

be Level 3. Referring to the average income level of Chinese citizens and Tsinghua alumni,

we chose CNY 100,000 as the standard. If the annual income was higher than CNY 100,000,

we regarded it as high and labeled it 1. In addition, we use family income as a control

variable, measured by the relative level of household income in society (top 25%, lower than

25% but above 50%, lower than 50% but above 75% or lower than 75%).

Academic performance is considered to be closely related to entrepreneurial activities

(Jones, 1997), so we used GPA as a control variable. Bates (1990) views that the level of

!! 26!

education not only affects the performance of the founding companies, but also affects the

entrepreneurial intention and entrepreneurial activities, so we used dummy variables for

master's and doctoral degrees. Overseas experience often means a higher level of

understanding about science, technology or the market economy, thus we also controlled for

this factor in the study. Lazear (2005) found that entrepreneurs tend to be generalists.

Therefore, we assigned 1 to people who studied different majors in university.

Joining the Chinese Communist Party (CCP) or becoming a leader of a student

organization often indicates a person has leadership abilities or potential, which may be

relevant to entrepreneurial activities. Work length is an aspect of work experience which is

different from the aspect of experience in different organizations and it may also affect

entrepreneurship. Therefore, we controlled these three variables.

We also considered controlling for macroeconomic environment factors, which affect

entrepreneurship. For alumni without entrepreneurial activities, they may or may not have

entrepreneurial intentions. But since they experienced the changing macro environment at

different ages, and macroeconomic environment changes in a given year affected everyone

during that year, thus we view that for this group the effect of the macroeconomic

environment has been included in other control variables.

For alumni with entrepreneurial activities, we believe that whether or not they choose to

start businesses in a particular year could be affected by the macro environment. Figure 2

shows the average time gap (in years) between graduation and the first entrepreneurial

activity of alumni from different decades. We found that the level of entrepreneurial activity

varied across time, thus we revised our regression model in the following parts. We chose

!! 27!

the ratio of the non-public economy to the national economy as the measurement of the

entrepreneurial environment (see Figure 3). We believe that this ratio reflects the changes in

Chinas business environment better than other indicators such as GDP growth, because as

part of the private economic sector, individual entrepreneurship may not start at the same

time with and happen at the same speed as the entire national economic development. By

observing this proportional indicator, we can tell whether the macro environment is more

conducive for and encourages the development of private sector. At the same time, the ratio

represents the cultural and political environments.

As shown in Figure 3, the ratio of the non-public economy to the national economy was

lower than 10% before 1993, then kept increasing from 1993 to 1997, and fluctuated in a

more stable range between 40% and 60% during 1998-2007. We believe that it reflects the

process in China where the private sector, including individual entrepreneurship, grew from

zero and then reached a certain stable level. In order to control for the macro environment

changes, we ran a regression for alumni who started firms after 1998 and all those with

entrepreneurial intentions. We view 1982 as another important year. The Cultural Revolution

in China occurred during 1966 to 1976. We found that no alumni who graduated during

1968-1981 indicated entrepreneurial intentions. After going through historical records from

the Tsinghua University History Museum, the National College Entrance Examinations

resumed in 1977, and this was the year that Tsinghua University admitted the first class of

students who graduated (in 1982) based on merits. We used entrepreneurial activities as the

dependent variable and ran regressions with alumni who started companies after 1998 and

post-1982 graduates with entrepreneurial intentions (Table 3, M2-3).

!! 28!

--------------------------------- Insert Figures 2 and 3 about here

---------------------------------

Empirical Results

We ran a logit regression for the subsample of non-entrepreneur alumni in order to

examine the relationship between work experience in multiple types of organizations and

entrepreneurial intentions. The results are shown in Table 3, M1-1. Some alumni graduated

before 1949, meaning that they were educated under a different government system, and were

about 40 years old in 1978 at the start of reform and opening up. According to the "aging out

effect", if an individual does not start a business in his 40s, the possibility that he would

become an entrepreneur is not high (Levesque and Minniti, 2006; Roberts, 1991). Therefore,

we excluded such records, and obtained the results shown as Table 3, M1-2. In both models,

we found that work experience in multiple types of organizations and entrepreneurial

intentions are significantly correlated, but the correlation is negative. That is, if an alumnus

worked in multiple types of organizations, he may have lower entrepreneurial intentions; this

does not conform to our hypothesis 1a. However, this result supports the idea that these

individuals may be discovering unexpected and unintended entrepreneurial opportunities as a

result of their work experience in multiple types of organizations. If working in multiple

organization types is an indication simply of a preference for variety, then these individuals

should also have been more likely to report entrepreneurial intentions. However, if work

experience across institutional logics has a causal effect as we hypothesized, then the

individuals should be more likely to discover an entrepreneurial opportunity and take action

on it. However, they should be no more likely to want to be an entrepreneur in the abstract

than individuals who have only worked in a single organization type. Thus, we turn to

!! 29!

examine the results for entrepreneurial activity next.

We ran regressions for all alumni, examining the relationship between work experience

in multiple types of organizations and entrepreneurial activities (Table 3, M2-1). Compared

with alumni with work experience in only one type, those who worked in multiple types of

organizations have 74.3 percent higher probability of starting a new business (M2-2). Results

in M2-1, M2-2, and M2-3 indicate that work experience in multiple types of organizations

and entrepreneurial activities are significantly positively correlated. This is consistent with

our hypothesis 1b. Others being equal, when an alumnus switches from having experience in

just one type of organization to that in multiple organizations, the likelihood that he will be

involved in entrepreneurial activity increases by 67% (M2-3).

We ran a logit regression on the data of all alumni who have entrepreneurial intentions

or activities (Table 4, M3-1). In order to control for the macro environment, we ran a

regression for all alumni who have entrepreneurial intentions and those who started new

firms after 1998; the results are shown in Table 4, M3-2. To be even more careful, we also

ran a regression on the data of post-1982 graduates who have entrepreneurial intentions and

those who started new firms after 1998; the results are shown in Table 4, M3-3. We found

that entrepreneurial activities are significantly related to work experience in enterprises,

which supports hypothesis 2 that having experience in similar types of organizations is useful

to encouraging entrepreneurial behavior (M3-3).

--------------------------------- Insert Table 3-5 here

---------------------------------

Hypothesis 3a was that work experience in multiple organization types should be

associated with an increase in ideas from work experience. We treat the variable idea from

!! 30!

work experience in government as the dependent variable in model 4-1. Under the same logic,

model 4-2 is about ideas from work experience in industry. Both models show that getting

ideas from work experiences is positively and significantly related to number of types of

organizations, supporting the hypothesis. Hypothesis 3b was that the effects would be

stronger for those with non-management degrees. In model 5-1, the variable

non-management-degree is significantly and negatively related to entrepreneurship. In model

5-2, the interaction term between non-management-degree and work experience in multiple

types of organizations is positive and significant, supporting hypothesis 3b.

Conclusion and Discussion

This paper contributes to the literature on institutions and entrepreneurship by

showing that entrepreneurial behavior may be fostered by career experiences that span

multiple institutional logics and inhibited by careers within only one type. Institutional theory

can help entrepreneurship research to understand how the environment shapes behavior.

Extending institutional theory into the context of entrepreneurship aids our understanding of

emergence and change processes from an institutional perspective. Thus, our results have

implications both for institutional theory and entrepreneurship (Tolbert et al. 2010).

Implications for Institutional Theory. Prior institutional research has brought to light the

ubiquitous and important roles of norms, standards and rules for organizations and

well-functioning societies. Previous work on institutional theory emphasizes stability and the

effects of a practice or rule becoming standardized and eventually fading into the background

as it becomes taken-for-granted. Yet, this focus on the durable impact of institutions has

limited explanations of how institutions might also promote change and entrepreneurial

!! 31!

behaviors leading to venture emergence. Our contribution to institutional theory is to extend

the ability of institutional theory to explain entrepreneurial behavior, particularly among

those individuals who have an internal flexibility due to their work history.

More recent work by institutional theorists begins to shed light on how institutions

and regulatory changes can lead to increases in entrepreneurship (Sine et al. 2005, Romanelli

1989). In focusing on institutional changes as external shocks that lend support to a specific

emerging and often initially uncertain industry (i.e., wind power, recycling, soft drinks,

educational publishing, etc.), we see that a change in institutions can spark entrepreneurship.

Prior literature has said relatively less about what processes foster entrepreneurship and on an

on-going basis in more stable environments (Tolbert et al. 2010, Scott 2008).

We show that even when the institutional environment is more stable,

entrepreneurship can occur as a result of individuals moving across institutional

environments. Institutional flexibility and the presence of multiple, heterogeneous institutions

can spur entrepreneurship (Yang, Eesley, Tian and Roberts, 2012). We build on this prior

work by showing that individuals can come to embody multiple, heterogeneous institutional

influences as a result of work experiences spanning institutional logics. Individuals gain a

facility for questioning taken-for-granted assumptions, frame-breaking behaviors and

divergent thinking through building diverse network types and skills working within multiple

institutional logics (i.e. multiple organization types). We show that rather than being an

aspect of the environment, flexibility (in terms of institutional logics) can be embedded in the

individual and lead to entrepreneurial ideas as a result of work history.

We also benefit from and build on older work on microfoundations of institutional

!! 32!

theory (Berger and Luckman 1967, DiMaggio and Powell 1991). An important, growing

literature has begun to contribute to the micro-foundations of institutional theory by showing

the mechanisms by which institutional changes are pulled down and situated inside

individual choices (Powell and Colyvas 2008; Colyvas 2007, Colyvas and Powell 2006).

Studying this issue presents an opportunity for a second contribution given that

institutional theory has predominantly looked at the influence of institutions on aggregate

founding rates immediately following institutional change. Instead, we contribute by showing

that entrepreneurship can emerge due to the movement of individuals across institutional

settings. The exposure to different assumptions, mindsets and values across work experiences

during their lives may have an important, more lasting effect. It builds skills and networks

that help enable entrepreneurial opportunity recognition. Examining individuals as they move

across institutional settings allows us to theorize about how movement across institutions

imprints individuals through their work experience, persists, and influences individuals years

later. This allows institutional theory a mechanism for explaining creation and emergence

without having to resort to exogenous institutional changes.

The movement of individuals across institutional logics is relatively more important

when more creative and innovative behavior is desired, as opposed to greater standardization

and homogeneity. It is also relatively more important in settings that have previously been

particularly rigid and standardized. Would higher levels of movement across institutions and

organizational types still produce positive effects on entrepreneurship? There must be a point

of diminishing returns in which the individual is not remaining in an organization long

enough to absorb the new institutional logics. Clearly, more research is needed to test for

!! 33!

boundaries on benefits. We see a number of possible avenues to extend this line of theorizing,

which others may build upon. We might also consider whether there are mechanisms for

training individuals in these frame-breaking behaviors, in exposing and questioning

taken-for-granted assumptions and in divergent ways of thinking without their needing to

alter their careers so drastically.

Implications for Entrepreneurship Literature

The entrepreneurship literature has explored which individual characteristics are

associated with entrepreneurs. However, in focusing on individuals, this literature has not

typically considered the role of the institutional context in which those individuals are

embedded. A growing stream of literature examines career experience as an asset for

entrepreneurs (Boeker, 1989; Haveman, 1993; Haveman and Cohen, 1994; Phillips, 2002;

Beckman, Burton and OReilly, 2007). Yet, this literature has not explored how experience

working in multiple sectors, representing a variety of institutional logics as a result of fosters

entrepreneurship. It does this by providing the experiences, networks and skills that allow

individuals to better engage in questioning hidden assumptions, thinking about old problems

in new ways, and other frame-breaking behaviors. In this way, our findings contribute to

prior work on entrepreneurship by bringing to it insights from institutional theory.

Additionally, after more than 30 years of institutional change, interest in research on Chinese

entrepreneurs is increasing (Batjargal 2007). However, entrepreneurship literature focuses on

developed countries and few have looked into the institutional level and entrepreneurship in

developing countries, which are a natural laboratory for institutional theory.

Contrary to prior work, it is not merely a change in institutions itself that drives

!! 34!

entrepreneurship via the creation of misalignment with incumbent firms, but it is also the

movement of individuals across organizational types with varied institutional logics that

shapes individual choices for entrepreneurship. Broad career moves into different

institutional contexts can foster more innovative, divergent, entrepreneurial behaviors.

Without such a theory, institutional theory struggles for a middle ground between heroic

actors and cultural dopes, requiring an exogenous shock for people to escape their habits or to

explain how social movements, disruption and deviance occurs. In simple terms, we advance

a view that it is incorrect to associate stability with the institutional level and change purely

with the individual, rather the interaction of the two produces examples of creativity,

frame-breaking behaviors and emergence, as embodied in this case in entrepreneurship.

!! 35!

Table 1: Statistical comparison between Tsinghua graduates and the survey respondents

Comparison Tsinghua Graduates Our survey Major Engineering 62.5% 62.2%

Science 11.9% 10.6% Arts 12.9% 13.7% Others (Medicine,

Architecture, Law, etc.) 12.7% 13.5%

Rate of Female

2000 About 12% 11% 2007 About 30% 28%

Advanced Education

PhD Degree Holder 19.2% 19.3% Master Degree Holder 53.4% 53.9%

!Figure 1: Number of Entrepreneurial Alumni in Each Decade and the Proportion Compared to

Contemporaries

0!

0.05!

0.1!

0.15!

0.2!

0.25!

0.3!

0.35!

0.4!

0!

100!

200!

300!

400!

500!

600!

700!

800!

900!

1949-1960! 1961-1970! 1971-1980! 1981-1990! 1991-2000! 2001-2007!

Entrepreneurs!(Graduated!during!the!decade)!Graduates!of!the!Decade!ProporCon!

!! 36!

Table 2: Descriptive Statistics of Subsamples Categorized by Status of Entrepreneurial Intentions and Actions

Alumni with entrepreneurial actions

Alumni without entrepreneurial actions but with entrepreneurial intention

Alumni with neither entrepreneurial intention nor actions

Total 453 826 927 Ratio of male 0.94 0.86 0.87 Earliest birth year 1927 1922 1908 Latest birth year 1984 1985 1984 Average age 34.29 41.7 54 Earliest graduation year

1953 1947 1929

Latest graduation year

2007 2007 2007

Average Number of working years

12.1(before entrepreneurship)

11.9 17

!Figure 2: Average Time Gap (in Years) Between Graduation and the First Entrepreneurial Activity of

Alumni from Different Decades

!!

-5!

0!

5!

10!

15!

20!

25!

30!

35!

40!

0!

20!

40!

60!

80!

100!

120!

140!

Number!of!entrepreneurs! Average!Cme!gap!(in!year)!

!! 37!

Figure 3: The Ratio of the Non-public Economy to the National Economy, by Year

!

0.00%!

10.00%!

20.00%!

30.00%!

40.00%!

50.00%!

60.00%!

1980! 1983! 1986! 1989! 1992! 1995! 1998! 2001! 2004! 2007!

!! 38!

Table 3 Logit Regressions Predicting Entrepreneurial Intentions and Activity

* p

!! 39!

Table 4 Logit Regressions Predicting Entrepreneurial Activity!

* p

!! 40!

Table 5

* p

!! 41!

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