Research Statement

Research overview

In general, my mostly quantitative research focuses on the antecedents and consequences of entrepreneurial activity by employees, also known as intrapreneurship, a term first coined by Pinchot (1985). Entrepreneurial employees are individuals that contribute to the development of new ideas that they themselves initiated, and that create added value for their employers. With regard to entrepreneurship one often thinks of people involved in setting up a business, or being the owner-manager of a new business (Reynolds et al., 2005). However, taking the definition of entrepreneurship by Shane & Venkataraman (2000) as a starting point – the discovery, evaluation and exploitation of opportunities to create future goods and services – one realizes that in essence any worker in society could take on such an entrepreneurial role. Hence, not only those wo exploit opportunities for own risk and reward (Jensen & Meckling, 1976; Knight, 1921), but also people that have a paid job. Extant research indicates that entrepreneurial employee activity may even be more beneficial for welfare in developed economies than independent entrepreneurial activity (Stam, 2013). A  vast majority of the (independent) entrepreneurs does not develop new goods and/or new services. Intrapreneurs, however, are involved in the development of new business activities for their employers by definition. Think of the establishment of a new outlet or subsidiary, or the development of a new product, service, or product-market combination.

Given that there are two types of entrepreneurship in society, I study why people in some countries are more likely to end up as intrapreneurs rather than as entrepreneurs, and vice versa. I especially look into the effects of the formal and informal institutional framework on the allocation of entrepreneurial talent across established and newly established organizations. I hereby adopt theories from institutional economics and cross-cultural research. Where much of the traditional entrepreneurship literature focused on the entrepreneurs (e.g. its personal characteristics) and the organization (e.g. types of organizations, their structures and behaviors), researchers largely overlooked the role that the broader context plays. Only recently entrepreneurship scholars have started to systematically explore the relationship between institutional theory and entrepreneurial activities, predominantly meaning the process of founding and managing new businesses (Hwang & Powell, 2005; Sine & David, 2010). Hardly any attention has been paid to the link between institutions and entrepreneurial activity that takes place within existing organizations. My work contributes to the stream of literature by also taking into account intrapreneurship as a way for individuals to exploit entrepreneurial opportunities. The question then becomes how the institutional environment influences where people will be entrepreneurially active. Institutions, i.e. the rules of the game in society (North, 1990), determine the relative pay-offs to different occupations, and play a key role in the allocation of entrepreneurship in society (Acemoglu, 1995; Murphy et al., 1991).

On the consequences side, I contribute to the long-running debate whether or not entrepreneurship is beneficial for countries’ economic performance (Audretsch et al., 2006; Wennekers & Thurik, 1999). By not only focusing on independent entrepreneurship – which is frequently born out of necessity, especially in low-income countries – but also including intrapreneurship, I get a more complete picture of how entrepreneurial activities relate to national-level economic growth. So far, intrapreneurship has largely been ignored in the literature due to a lack of internationally comparative data. The Global Entrepreneurship Monitor (GEM) has recently filled this gap by including a measure for what they call entrepreneurial employee activity for multiple times now.

Doctoral thesis

My doctoral thesis includes four distinct yet related studies on intrapreneurship. In one of its chapters we focus on formal institutions as national-level antecedents of entrepreneurial activity in society (co-author: Erik Stam). More specifically, we disentangle employment protection legislation (EPL) by investigating the unintended effects of two of its main elements, i.e. the severance pay and the notice period. Our results reveal opposite effects; a higher severance pay is found to be negatively related to entrepreneurial employee activity, whilst the notice period shows a positive relationship. The opposite is true for the effects on independent entrepreneurial activity.

In another chapter we implement a cross-cultural approach, and study how countries’ cultural context influences the occupational choice of entrepreneurial talent (co-authors: Coen Rigtering and Niels Bosma). Given an individual’s involvement in innovative entrepreneurial activity, he or she is more likely to be an entrepreneurial employee in countries where levels of uncertainty avoidance and interpersonal trust are high. The level of performance orientation in society is not significantly associated with individual’s entrepreneurial occupational choice. Another remarkable finding concerns one’s educational level; the higher educated, the more likely someone is to be involved in intrapreneurship rather than entrepreneurship, conditional on being involved in innovative entrepreneurial activity at all.

Another chapter extends the economic occupational choice model originally developed by Lucas (1978), and subsequently tests the model using GEM survey data. Driven by the transition from a managed economy towards an entrepreneurial economy (Thurik et al., 2013), lower-level employees are increasingly held responsible for the development of new business activities that enhance the firm’s competitiveness. Hence, an increasing share of the workforce is involved in entrepreneurial activities as an employee. Previous occupational choice models only compared employment with independent entrepreneurship arguing that individuals will become an entrepreneur if the expected rewards of entrepreneurship outweigh employment wages (also see Van Praag & Cramer, 2001). Acknowledging that both employees and entrepreneurs can be more or less entrepreneurial alters the conclusions drawn from earlier models.

Even though there is a long tradition of studying the relationship between entrepreneurship and economic growth, there are still many gaps when it comes to the explanation of economic growth. A mere focus on independent types of entrepreneurship is one of them. In another chapter of my doctoral thesis I also incorporate intrapreneurship and test whether macro-economic performance benefits more from any of the two different types of entrepreneurial activity. So far, there is mixed evidence on the effect of independent entrepreneurship on national economic growth. Depending on the type of entrepreneurship (growth-oriented, high-tech and/or opportunity-driven) and the context (in low-income, emerging or high-income countries, in a peripheral or central region), observed effects are negative, positive or non-significant (Stam et al., 2011; Stam & Van Stel, 2011; Van Stel & Storey, 2004). We argue that entrepreneurial employee activity has a positive effect on economic growth, and that it is stronger than the effect of independent entrepreneurial activity.

I expect my doctoral thesis to improve existing theories on entrepreneurship, innovation, and their explanation of macro-level economic growth by including a hitherto neglected type of entrepreneurship, i.e. intrapreneurship. Also the institutional economics literature and the literature on cross-cultural research will benefit from my studies that not only link formal and informal institutions to independent types of entrepreneurship, but also to entrepreneurial activity by employees. From a societal point of view, my research is relevant for several good reasons. First, my doctoral thesis provides novel insights into how different types of entrepreneurial activity affect economic growth. Second, insights into the antecedents of intrapreneurship will improve the effectiveness of interventions at the organizational and country level to improve the competitiveness of firms and societal welfare.

Other projects

Next to my doctoral thesis, I have been collecting data on approximately 600 Dutch employees in cooperation with the Netherlands Organization for Applied Scientific Research (TNO). Our questionnaire included two ways to identify intrapreneurs. In both cases, the identified intrapreneurs significantly differed from other employees with regard to some demographics and other relevant characteristics. So far, the project has led to a report introducing our measures of intrapreneurship and organizational factors that influence such entrepreneurial behavior (Preenen et al., 2014), and two articles in Dutch journals (Liebregts et al., 2015; Preenen et al., 2015).

I also frequently conduct research on related topics, such as (solo) self-employment. For a EU Horizon 2020 project called Financial and Institutional Reforms for the Entrepreneurial Society (FIRES), led by Mark Sanders, I wrote a case study on Dutch solo self-employment (Liebregts, 2016). Amongst others, the paper argues that the boundaries between employment and self-employment are blurring; on the one hand we have entrepreneurs that each and every day perform the same tasks as they would have done as an employee (i.e. routine self-employed), and on the other hand there are employees who are entrepreneurially active for one or more employers (i.e. entrepreneurial employees). To get a complete view of the state of entrepreneurship, one should not neglect workers who engage in innovative activities as part of their paid job. Hence, the transition from a managed economy towards an entrepreneurial society (Thurik et al., 2013) also requires a policy standpoint on how to stimulate entrepreneurial activity by employees. Entrepreneurship policy should aim at increasing the quantity and quality of innovative (or non-routine) activities by all workers (Autor et al., 2003; Schumpeter, 1934), i.e. both employed and self-employed.

A version putting more emphasis on potential policy choices will end up in a collection of essays published by the Dutch Scientific Council for Government Policy (WRR) (forthcoming, 2017; co-author: Erik Stam). This publication is part of a long-lasting project on the Future of Work, and specifically deals with the flexibilization of the labor market. A previous publication already collected scientific insights about the labor market effects of robotization. An extended version of my working paper for FIRES, also including data analyses, will be part of a book published by Oxford University Press (OUP) (forthcoming, 2017; co-authors: Niels Bosma and Erik Stam).

Future research

Looking ahead, there is much more to learn about how the institutional context at different levels determines whether entrepreneurial individuals decide to become intrapreneurs or entrepreneurs (e.g. the prevalence of corruption, employer’s willingness to delegate authority to subordinates). Also, the entrepreneurship literature still lacks integrative research on how (controllable) organizational factors influence entrepreneurial behavior by employees. This not only concerns the level of employee discretion in performing tasks, but also factors like how challenging tasks are, employee voice, et cetera. If employers do not manage to create an entrepreneurial environment that fosters and facilitates creativity and innovation by employees, then employees might be inclined to leave the firm to set up a new business independently (Klepper & Thompson, 2010).

I also plan to make use of TNO’s employee data for at least one additional paper. This should lead to a more complete typology of intrapreneurs as compared to other employees. Preliminary results show that intrapreneurs have significantly more experience with independent entrepreneurship than other employees. Also, they are more likely to start a new business (again), possibly based on an idea and/or investments for their current employer, i.e. as a spin-off (Bosma et al., 2013; Liebregts et al., 2015). Hence, entrepreneurial individuals seem to be entrepreneurially active in different contexts, namely when employed or self-employed, alternately or simultaneously (Folta et al., 2010; Liebregts et al., 2015). In the latter case, one speaks of hybrid entrepreneurship. Underlying mechanisms of a positive relationship between intrapreneurship and independent entrepreneurship at the micro level are (1) ability (e.g. human capital, self-efficacy, self-esteem), (2) attitude (i.e. a positive attitude towards entrepreneurial behavior), and (3) personality traits (e.g. a proactive personality, high need for achievement, locus of control).

Ideally, I am soon able to collect micro-level longitudinal data tracking entrepreneurial workers over time, so that I can gain more insights into where and how they are entrepreneurially active throughout their careers, what factors at multiple levels determine their choices (causally), and what this means for individual, firm and country performance. Additional qualitative data would increase our knowledge about the kinds of new business activities that entrepreneurial workers exactly develop, with whom, why, and how, and what kind of constraints they face in doing so.

Werner Liebregts,
Sep 28, 2016, 3:56 AM