Joe Raffiee

We examine how institutional factors may affect microlevel career decisions by individuals to create new firms by impacting their ability to exercise entrepreneurial preferences, their accumulation of human capital, and the opportunity costs associated with new venture formation. We focus on an important institutional factor—immigration-related work constraints—given that technologically intensive firms in the United States not only draw upon immigrants as knowledge workers but also because such firms are disproportionately founded by immigrants. We examine the implications of these constraints using the National Science Foundation’s Scientists and Engineers Statistical Data System, which tracks the careers of science and engineering graduates from U.S. universities. Relative to natives, we theorize and show that immigration-related work constraints in the United States suppress entrepreneurship as an early career choice of immigrants by restricting labor market options to paid employment jobs in organizational contexts tightly matched with the immigrant’s educational training (job-education match). Work experience in paid employment job-education match is associated with the accumulation of specialized human capital and increased opportunity costs associated with new venture formation. Consistent with immigration-related work constraints inhibiting individuals with entrepreneurial preferences from engaging in entrepreneurship, we show that when the immigration-related work constraints are released, immigrants in job-education match are more likely than comparable natives to found incorporated employer firms. Incorporated employer firms can both leverage specialized human capital and provide the expected returns needed to justify the increased opportunity costs associated with entrepreneurial entry. We discuss our study’s contributions to theory and practice.

We conceptualize the mitigating role of trait core confidence on psychological distress in entrepreneurship manifested by occupational stress, anxiety, and depression. To facilitate field research, we first developed a short trait core confidence scale and validated it in six independent samples (N = 2,434). To test our hypothesis that trait core confidence negatively relates to base-line levels of psychological distress as well as reduces fluctuations of distress in entrepreneurship, we collected data from a 3-day entrepreneurial event called Startup Weekend across seven occasions in the United States. High trait core confidence was related to lower psychological distress both at the start of the event on Friday and at the end of it on Sunday. Core confidence remained stable from Friday to Sunday, as well as 1 month following the event, affirming its trait properties. Additionally, we measured team confidence during the event and found that high team confidence reduced psychological distress of team members. This research contributes to the research on the role of dispositions in occupational health psychology and to a better understanding of how distress of aspiring entrepreneurs is mitigated by trait core confidence.

We advance a theoretical framework of how entrepreneurial ideas of employees are commercialized as a function of their uncertainty, firm-specificity, and appropriability. We argue that as uncertainty increases, the choice of commercialization mode will increasingly be driven by differences in subjective judgments of the idea’s value, with firms having an advantage in assessing the true value of their employee’s ideas relative to market because of their firm-specific nature. Building on this insight, we develop a formal model of commercialization choice that maps idea characteristics to commercialization outcomes—spinouts, internal commercialization, market mobility, or abandonment—while also predicting how these relationships will be moderated by the cost of startups, the value of the idea, and the institutional context, as well as how value will be created and appropriated within each mode. In particular, the model distinguishes between four different types of employee spinouts, including the previously neglected case where the employer sees value in an idea and wants to commercialize it, but the employee still prefers to start their own firm. We thus offer a more nuanced view of employee entrepreneurship, based on differences in subjective judgment under uncertainty, the firm-specific nature of employee knowledge, and appropriability regimes.