Individual and Opportunity Factors Influencing Job Creation in New Firms

We build on multiple theoretical perspectives to investigate the unique and joint effects of individual- and opportunity-level factors affecting job creation in new firms. We tested hypotheses using survey data from individuals who transitioned from unemployment to self-employment under the auspices of a German public policy program. Our findings reveal that an entrepreneur's breadth of knowledge has a negative influence on the firm's job creation, whereas the entrepreneur's leadership experience has a positive influence. However, as the sector-specific labor requirements of a business opportunity increase, both breadth of knowledge and leadership experience allow founders to operate their firms with fewer employees.