Events

Ms. Liyue Yan
Ph.D. Candidate in Strategic Management and Entrepreneurship
University of Maryland

We study the effect of winning professional performance awards on entrepreneurial entry. We propose that performance awards can increase professionals’ likelihood to become entrepreneurs though increasing their confidence and reputation. We examine the effect of winning a performance award on stock analysts’ likelihood to become entrepreneurs by comparing the winners with a control group with similar ability. Using LinkedIn data, we trace the careers for about 3,000 analysts and find award winners’ likelihood of becoming entrepreneurs is 30% to 40% higher than that of the non-winners. Additionally, we find that the effect of winning is driven by mid-career professionals and those who work at relatively bigger firms. The evidence suggests that winning awards complements existing resources in entrepreneurial entry decisions. Our study provides evidence that performance awards may be low-costs instruments that complement formal policy to encourage entrepreneurship.