A Labor Market Theory of Entrepreneurship in Knowledge-Intensive Industries

Stephen Appold
Department of Sociology
National University of Singapore
10 Kent Ridge Crescent
Singapore 119260

By highlighting how individual investment in specialized skills can be threatened by environmental turbulence, this paper provides a theoretical basis for the effects of career concerns on the formation of new firms.  The institutional rigidities created by internal labor markets both facilitate the accumulation of skill and, paradoxically, foster entrepreneurship under particular conditions.  A theory of entrepreneurship, drawing on human capital theory, skills-opportunity theory, and internal labor market theory outlines the conditions under which spin-offs will develop in knowledge-intensive industries.

 

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