Bukky Oyedeji

Abstract

I examine the understudied effects of perceived non-transferable knowledge on labor market choices after firm-initiated turnover. Using a large and nationally representative dataset, I evaluate how workers’ perceived knowledge transferability, expectations to remain at a firm, and type of turnover experienced correlate with the decision to engage in entrepreneurship. I find that the release of workers with perceived non-transferable knowledge into the external environment through firm-initiated turnover reliably foreshadows entrepreneurship, especially as workers’ prior expectations to continue wage employment at a source firm increases. This finding indicates that beyond necessity, opportunity and financial resources, workers’ self-perceptions of their human capital and unfulfilled career expectations matter to the choice of entrepreneurship. It also highlights firm-initiated turnover as a form of knowledge divestiture with important ex-post implications.