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A proposed explanation for why business creation is often found to increase in recessions is that there are two components to entrepreneurship – “opportunity” and…
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…
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…
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…
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 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…
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 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…
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.
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…
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 chapter is concerned with examining the families that play Pokémon Go together within the context of spatial practices. The chapter begins by outlining the general…
This chapter is concerned with examining the families that play Pokémon Go together within the context of spatial practices. The chapter begins by outlining the general approach to spatiality that we adopt throughout this book, which is predicated on the ‘spatial turn’ within the social sciences. Here, spatial practices are understood as being socially constructed in day-to-day live, as opposed to being something simply given. In other words, ‘the concept of the city’ and the ‘urban fact’ (de Certeau, 1984, p. 1, italics in original) are not one and the same thing. Instead, the phenomenology of space is moulded in the social realm as part of the practice of everyday life, which has consequences for hybrid reality games (HRGs) like Pokémon Go. After delineating between ‘space’ and ‘place’ à la the ‘mobilities turn’, we shift our attention to embodied approaches to urban life. This begin with an examination of the art of the flânerie, which has been reimagined to account for the ubiquity of mobile media, and more recently, locative games. A review of the literature surrounding locative games demonstrates that, for the most part, concerns about spatiality have not extended to the kind of intergenerational play that is the focus of this book. Drawing on our original study of Pokémon Go, as outlined above, then, the chapter is driven by the following research questions. First, to what extent does Pokémon Go lead to families spending more time outside and how is this reshaping experienced. Second, what effect does this HRG has on the routes and pathways families choose to follow while traversing their physical setting, as well as the sites they frequent. Third, to what extent do families engage with the various elements of Pokémon Go and what does this suggest about the evolution of locative play in the context of earlier location-based social networks (LBSNs).