Search results

A proposed explanation for why business creation is often found to increase in recessions is that there are two components to entrepreneurship – “opportunity” and “necessity” – the latter of which is mostly counter-cyclical. Although there is some agreement on the conceptual distinction between these two factors driving entrepreneurship, there is little consensus in the literature on empirical definitions. The goal of this chapter is to propose an operational definition of opportunity versus necessity entrepreneurship based on the entrepreneur's prior work status (i.e., based on previous unemployment) that is straightforward, based on objective information, and empirically feasible using many large, nationally representative datasets. We then explore the validity of the definitions with theory and empirical evidence. Using datasets from the United States and Germany, we find that 80–90% of entrepreneurs are opportunity entrepreneurs. Applying our proposed definitions, we document that opportunity entrepreneurship is generally pro-cyclical and necessity entrepreneurship is strongly counter-cyclical both at the national levels and across local economic conditions. We also find that opportunity vs necessity entrepreneurship is associated with the creation of more growth-oriented businesses. The operational definitions of opportunity and necessity entrepreneurship proposed here may be useful for distinguishing between the two types of entrepreneurship in future research.

Individuals who spend a large percentage of their incomes on consumption are perceived to prefer risks. Since entrepreneurs are well recognized as risk-takers, this chapter investigates whether consumption propensity is associated with entrepreneurship. Using micro-level data from Chinese Household Income Project, we find that households with a higher income–consumption ratio on average have a higher preference for risk-seeking, while they have a lower probability to be entrepreneurs. However, households who have higher consumption–income ratio and are in the top 10% of the wealth distribution are more likely to embark on entrepreneurship. In addition, we find that in-system connection (relationship with government-related units) decreases the likelihood of starting new business, while out-system connection (relationship with market units) increases it. These findings suggest that in an imperfect financial market, start-up finance and connections play important roles for entrepreneurship.

Although a lot of research has been done on the link between self-employment and unemployment, often focusing on the short-run of the relationship, the long-run association between the two variables has not received adequate attention. The paper aims to discuss these issues.

In this paper the authors examine the long-run relationship between self-employment and unemployment using panel cointegration methods allowing for structural breaks and covering a wide range of European OECD countries using the COMPENDIA data set over the period 1990-2011.

The findings indicate that a long-run relationship between self-employment and unemployment exist in the panel, but the cointegrating coefficients are unstable.

The estimates finds positive and statistically significant long-run association between self-employment and unemployment exists for more than 50 per cent of the countries included in the sample after the break. For the rest of the countries the authors find either negative or statistically insignificant association.

Research has consistently shown that the children of business owners are more likely to become business owners themselves. However, what mechanism(s) underlies this intergenerational correlation is still not clear. In this research I assess the importance of several mechanisms proposed to drive the children of business owners to expect to become business owners.

Quantitative analyses of representative data from the 1988 to 1992 National Education Longitudinal Study are employed.

Results are inconsistent with arguments asserting that the children of business owners expect to become business owners because of: the transmission of human capital or financial capital; the expectation of inheriting a business; a heightened awareness of the viability of business ownership; or preferences for having lots of money, leisure time, being successful in work, or steady employment. Findings are consistent with the notion that the intergenerational correlation in business ownership is a result of shared preferences and/or traits, and this effect is particularly strong when accompanied by awareness of paternal business ownership.

Identifying which mechanism underlies the intergenerational transmission may inform how to increase rates of business ownership, particularly among underrepresented groups, which is a matter of increasing policy interest. However, our understanding is limited because: the intergenerational transfer is consistent with numerous mechanisms; and employment outcomes are often used to make inferences about preceding processes. This chapter focuses on expectations that precede outcomes to clarify which mechanism operates in one stage of the transmission process.

This chapter aims to analyse the market of fertilizers in México during the pandemic crisis. The analysis of the fertilizer market in Mexico points out that the consumption of fertilizers has undergone a change in the structure in favour of consumers with the highest concentration and diversification. The analytical-descriptive and critical reflexive methods are applied both based on quantitative data gathered from secondary sources. This situation has contributed to a drop in the consumption of fertilizers because the farmer’s real income has fallen during the pandemic crisis. To take benefit of the opportunities arising from the crisis, the functioning of an integral model of entrepreneurship in green innovation business (GIB) that is currently emerging and in the process of internationalization is analysed. With respect to the GIB and eco-efficient company through the comprehensive method of entrepreneurship, it is observed that just as the company has some advantages in the product, it is also with many threats that are the big companies that are already positioned and that also compete with competitive prices. It is recommended that although the GIB has a wide network that is using the best way possible, it is necessary to increase the international network of contacts so that the business can grow quickly.

This paper is the first to present empirical evidence consistent with models of signaling through unemployment and to uncover a new stylized fact using the 1988–2006 Displaced Worker Supplement (DWS) of the Current Population Survey (CPS), namely that, among white-collar workers, post-displacement earnings fall less rapidly with unemployment spells for layoffs than for plant closings. Because high-productivity workers are more likely to be recalled than low-productivity ones, they may choose to signal their productivity though unemployment, in which case the duration of unemployment may be positively related to post-displacement wages. Identification is done using workers whose plant closed as they cannot be recalled, and no incentives to signal arise.

This survey overviews the literature on entrepreneurship and self-employment. The author catalogs the main contributions of this body of research and makes a distinction between issues on which there is now widespread agreement and those for which no consensus has yet emerged. This latter set of issues provides fertile ground for further research.

This paper analyzes causes of the low self-employment rate among Mexican-Americans by studying self-employment entry and exits utilizing panel data from the Survey of Income and Program Participation (SIPP). Our results indicate that differences in education and financial wealth are important factors in explaining differences in entrepreneurship across groups. Importantly, we analyze self-employment by recognizing heterogeneity in business ownership across industries and show that a classification of firms by human and financial capital intensiveness, or entry barriers, is effective in explaining differences in entrepreneurship across ethnic groups.

The purpose of this study is to examine entrepreneurial activity in the USA and whether it supports a “pull” or a “push” theory of startup creation. The “push” theory argues that individuals are pushed into entrepreneurship by negative external forces, such as job dissatisfaction, difficulty finding employment, insufficient salary or inflexible work schedule. The “pull” theory contends that individuals are attracted into entrepreneurial activities seeking independence, self-fulfillment, wealth and other desirable outcomes.

This paper incorporates three well-established measures when looking at impact factors; unemployment rates, gross domestic product (GDP) and household income. The current study is unique in that it introduces the Kauffman Startup Activity Index (KSAI) as the measure of entrepreneurial activity when examining impact factors.

The results of this study support the “pull” theory (or the entrepreneurial effect) of startup activity and further supports the idea that entrepreneurs look for opportunities in the marketplace, rather than being “forced” into self-employment.

Research is limited to having US data at the national level. Follow-up research could include parsing the data out to the state and local levels.

The results of this study suggest to the economic development community that incentives during times of economic growth could further incent entrepreneurial activity.

The tact used by the authors is unique in that it relied upon three historical variables – unemployment rates, US GDP and household income – and introduced a new variable, the KSAI, rather than the previously relied upon national startup activity data or startup activity.