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Article
Publication date: 15 October 2019

Iman Cheratian, Antonio Golpe, Saleh Goltabar and Jesus Iglesias

During recent years, the nexus between unemployment and entrepreneurship has been examined in depth in developed and industrialised economies but rarely in developing economies…

Abstract

Purpose

During recent years, the nexus between unemployment and entrepreneurship has been examined in depth in developed and industrialised economies but rarely in developing economies. The purpose of this paper is to investigate such a relation in the case of 30 Iranian provinces from 2005Q2 to 2017Q4. Using both the autoregressive distributed lag (ARDL) bounds testing and vector error correction method (VECM) Granger causality approaches, the findings show that a unidirectional short-run causal relationship from entrepreneurship to unemployment and vice versa was observed in 13 and 10 per cent of provinces, respectively. The authors also find evidence for unidirectional long-run causality in 77 per cent of provinces from unemployment to entrepreneurship, as well as 10 per cent of provinces from entrepreneurship to unemployment. Finally, the results confirm that in long-run, the “prosperity-pull” effects are considerably stronger than the “recession-push” effects in Iranian provinces.

Design/methodology/approach

The main target of this paper is to investigate the unemployment-entrepreneurship in the case of 30 Iranian provinces from 2005Q2 to 2017Q4 by using ARDL bounds testing and VECM Granger causality approaches.

Findings

The results confirm that in long-run, the “prosperity-pull” effects are considerably stronger than the “recession-push” effects in Iranian provinces. This finding reveals that the unemployment rate can be regarded as a critical instrument for hindering entrepreneurial activity by increasing the risk of business bankruptcy and pulling entrepreneurs out of self-employment. All these results must be taken into account in the construction of useful economic policies for the Iranian labour market.

Originality/value

The economic literature reveals that most empirical studies of the nexus between unemployment and entrepreneurship examined developed and industrialised economies and the analysis of such a relation for developing countries has not been considered by researchers. Thus, to fill this gap, this paper extends the current empirical literature by presenting new empirical evidence for the case of Iran, which has a developing economy.

Details

International Journal of Emerging Markets, vol. 15 no. 3
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 6 November 2017

James E. Payne and Andrea Mervar

The purpose of this paper is to extend the literature on the entrepreneurship-unemployment nexus to the case of Croatia.

Abstract

Purpose

The purpose of this paper is to extend the literature on the entrepreneurship-unemployment nexus to the case of Croatia.

Design/methodology/approach

The study uses the Toda-Yamamoto causality test within a vector autoregressive model to determine the causal dynamics between the self-employment rate (SER), unemployment rate (UR), industrial production, and credit in the case of Croatia from March 1998 to December 2016.

Findings

The results reveal support for the recession-push hypothesis. Specifically, the authors find that an increase in the UR Granger causes an increase in the SER.

Research limitations/implications

Due to data availability, a more detailed analysis of self-employment by industry was prohibitive.

Practical implications

The results emphasize the importance of recognizing business cycle dynamics and the availability of credit when evaluating the causal relationship between entrepreneurship and unemployment.

Social implications

As policy makers view entrepreneurship as a potential remedy for unemployment, particular attention needs to be given to both the phases of the business cycle and credit availability to support entrepreneurial ventures in the design of policy.

Originality/value

Previous studies on the causal dynamics between entrepreneurship and unemployment pertain to OECD countries. This is the first study to examine a transition economy recently admitted to the European Union.

Details

Journal of Entrepreneurship and Public Policy, vol. 6 no. 3
Type: Research Article
ISSN: 2045-2101

Keywords

Book part
Publication date: 12 June 2017

Mike Vuolo, Christopher Uggen and Sarah Lageson

This paper tests whether employers responded particularly negatively to African American job applicants during the deep U.S. recession that began in 2007. Theories of labor…

Abstract

This paper tests whether employers responded particularly negatively to African American job applicants during the deep U.S. recession that began in 2007. Theories of labor queuing and social closure posit that members of privileged groups will act to minimize labor market competition in times of economic turbulence, which could advantage Whites relative to African Americans. Although social closure should be weakest in the less desirable, low-wage job market, it may extend downward during recessions, pushing minority groups further down the labor queue and exacerbating racial inequalities in hiring. We consider two complementary data sources: (1) a field experiment with a randomized block design and (2) the nationally representative NLSY97 sample. Contrary to expectations, both analyses reveal a comparable recession-based decline in job prospects for White and African American male applicants, implying that hiring managers did not adapt new forms of social closure and demonstrating the durability of inequality even in times of structural change. Despite this proportionate drop, however, the recession left African Americans in an extremely disadvantaged position. Whites during the recession obtained favorable responses from employers at rates similar to African Americans prior to the recession. The combination of experimental methods and nationally representative longitudinal data yields strong evidence on how race and recession affect job prospects in the low-wage labor market.

Details

Emerging Conceptions of Work, Management and the Labor Market
Type: Book
ISBN: 978-1-78714-459-0

Keywords

Article
Publication date: 17 August 2021

Sorin Gavrila Gavrila and Antonio De Lucas Ancillo

The coronavirus disease 2019 (COVID-19) pandemic has taken society, business and industries by surprise leading to a worldwide economic recession, pushing organizations to rethink…

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Abstract

Purpose

The coronavirus disease 2019 (COVID-19) pandemic has taken society, business and industries by surprise leading to a worldwide economic recession, pushing organizations to rethink their business model in order to shift from activity shutdown toward sustainable growth. The purpose of this research is to comprehend the implications and relationship between entrepreneurship, innovation, digitization and digital transformation aspects as the levers to achieve this goal.

Design/methodology/approach

Following the existing literature, an empirical approach has been established involving a quantitative analysis of secondary information obtained from official datasets and reports.

Findings

The COVID-19 pandemic was found to be an unfortunate accelerator regarding both consumers' habits and organizations' innovation and digital transformation, breaking with the past leading to new sustainable growth business models.

Practical implications

The research provides an underlying outcome that addresses how wealth and economic value could be generated within the framework of new economic models in a post-pandemic environment.

Originality/value

The research highlights how the pandemic has disrupted what was known about sustainable business growth, and how this affects the future of business beyond the pandemic scenario, transforming the way society, businesses and customers interact.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 28 no. 1
Type: Research Article
ISSN: 1355-2554

Keywords

Book part
Publication date: 13 December 2011

Concepción Román, Emilio Congregado and José María Millán

Purpose – The purpose of this chapter is to shed new light on the effects of labor market institutions and the economic conditions on self-employment composition that may help the…

Abstract

Purpose – The purpose of this chapter is to shed new light on the effects of labor market institutions and the economic conditions on self-employment composition that may help the development of a comprehensive strategy to promote job creation and sustained economic growth in the post-2009 era.

Methodology/approach – Using microdata from the European Community Household Panel for the EU-15, we analyze the effects of employment protection legislation, start-up incentives, and economic conditions on transitions from unemployment and paid employment to self-employment, as well as on self-employment survival, with a special focus on the differentiated effect of these variables on different types of self-employment.

Findings – The empirical results suggest that the coexistence of recession periods, start-up incentives, and strict employment protection may be distorting the occupational choice against true entrepreneurs and favor less entrepreneurial forms of self-employment – such as last resort or dependent. Therefore, the differentiated effect of the regulatory environment and the economic conditions over different forms of self-employment – that contribute to job creation, growth and innovation processes in a different manner – may help explaining the different incidence in terms of employment of the economic crisis across countries.

Social implications – During deep recessions, stringent labor regulations might prompt that public expenditure designed to move the unemployed back to employment favors atypical forms of employment outside the scope of labor laws, deteriorating employment rights, and the social protection of workers. As a consequence, the interaction of different LMI and the business cycle should be considered when defining the regulatory environment.

Details

Entrepreneurship and Global Competitiveness in Regional Economies: Determinants and Policy Implications
Type: Book
ISBN: 978-1-78052-395-8

Keywords

Article
Publication date: 2 November 2015

James E Payne

– The purpose of this paper is to extend the literature on the entrepreneurship-unemployment nexus to include the role of economic policy uncertainty in the causal dynamics.

Abstract

Purpose

The purpose of this paper is to extend the literature on the entrepreneurship-unemployment nexus to include the role of economic policy uncertainty in the causal dynamics.

Design/methodology/approach

The study utilizes the Toda-Yamamoto causality tests of a vector autoregressive (VAR) model to infer the causal dynamics between the self-employment rate (SER), the unemployment rate (UR), industrial production (IP), and the economic policy uncertainty index (EPUI) in the case of the USA. In addition to the examination of the causal dynamics, generalize impulse response analysis is undertaken to examine the role of unexpected shocks to the current and future behavior of the variables specified in the VAR model.

Findings

The results reveal unidirectional causality from the SER, IP, and the EPUI to the UR. An increase in the SER and IP lowers the UR while an increase in the EPUI raises the UR. The findings also show unidirectional causality from the EPUI to IP in which an increase in the EPUI reduces IP.

Research limitations/implications

Due to data availability for higher frequency monthly data, the self-employment data limits the analysis to 2000:1 to 2014:11.

Practical implications

The results reiterate the importance of minimizing economic policy uncertainty as a means to facilitate effective planning by entrepreneurs and economic agents. Moreover, policies designed to encourage entrepreneurship (self-employment) aids in the reduction of unemployment.

Social implications

Policies designed to encourage entrepreneurship also facilitate the reduction in the UR. Also, greater policy transparency and stability has a positive impact on entrepreneurial activities.

Originality/value

This is the first study to incorporate the role of economic policy uncertainty in the examination of the causal dynamics between entrepreneurship and unemployment.

Details

Journal of Entrepreneurship and Public Policy, vol. 4 no. 3
Type: Research Article
ISSN: 2045-2101

Keywords

Article
Publication date: 1 April 1996

Dylan Jones‐Evans and Paul Westhead

Charts an increase in the total stock of high technology firms over the 1987 to 1991 period in the UK, as well as the employment contribution of firms over the same period. Finds…

1726

Abstract

Charts an increase in the total stock of high technology firms over the 1987 to 1991 period in the UK, as well as the employment contribution of firms over the same period. Finds that total employment in high technology firms declined over this period. However, the employment contribution of small high technology firms, particularly those engaged in technology‐based services activities increased. The employment contribution of this group was unable to offset the major employment losses made by large high technology firms (those with 100 or more employees) and firms engaged in more “conventional” activities in the wider economy, Claims that policy makers should continue to encourage the formation, survival and development of a growing and diverse stock of new and small high technology firms in the UK.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 2 no. 1
Type: Research Article
ISSN: 1355-2554

Keywords

Open Access
Article
Publication date: 22 May 2023

Marifa Muchemwa and Clifford Odimegwu

In a country that is marred by an excessively high unemployment rate, there is a need for policymakers to prioritise entrepreneurship in South Africa. The study aims to explore…

2368

Abstract

Purpose

In a country that is marred by an excessively high unemployment rate, there is a need for policymakers to prioritise entrepreneurship in South Africa. The study aims to explore the determinants of self-employment among the youth in South Africa and in the process answer the following question: Who are the self-employed youths in South Africa?

Design/methodology/approach

Different potential predictors of self-employment empirically used in the literature were used in this study. A probit regression model was used with the binary self-employment variable as the dependent variable and a host of independent variables. A nationally representative survey consisting of youths was used in the analysis.

Findings

The findings show that financial literacy increases the odds of being self-employed. Secondly, the odds of being self-employed increase with age as mature people are expected to have gathered enough networks and wisdom over the years. Thirdly, being male decreases the odds of being self-employed. When it comes to education, the only category that statistically increases the odds of being self-employed compared with no schooling is the tertiary level of education. The other educational levels are all statistically insignificant. From a policy perspective, the government should promote self-employment by investing in financial literacy as well as increasing access to tertiary education among disadvantaged groups.

Originality/value

The study is one of the first, to the best of the authors’ knowledge, to examine the characteristics of the self-employed using a nationally representative survey in South Africa.

Details

Journal of Entrepreneurship in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2053-4604

Keywords

Article
Publication date: 30 May 2008

Harvey Johnstone

This paper seeks to link the extraordinary success of an aboriginal community called Membertou First Nation to the literature of entrepreneurship and small‐ and medium‐sized…

562

Abstract

Purpose

This paper seeks to link the extraordinary success of an aboriginal community called Membertou First Nation to the literature of entrepreneurship and small‐ and medium‐sized enterprises.

Design/methodology/approach

The paper recounts the remarkable case of the people of Membertou First Nation who have been very successful in the area of economic development. It then considers their objective to further promote entrepreneurship within in the community.

Findings

The literature informs us that fast growing firms contribute disproportionately to job creation, wealth creation, and longer term support systems of local economies. The paper suggests that some of the unique circumstances that would appear to favor efforts to raise rates of new firm formation may ultimately constrain growth.

Research limitations/implications

The findings are limited by the unique circumstances operating within Canada and may not apply to other situations. Moreover, as Membertou First Nation is an urban‐based reserve it faces a different set of opportunities and constraints than rural‐based communities within Canada.

Originality/value

At one level, the story of Membertou First Nation is inspirational. But, this paper identifies some of the unique challenges and barriers faced by First Nations people pursuing opportunities as entrepreneurs. Challenges include issues of political stability; the need to respect the value placed upon community, conservation and sustainability by the culture the limited access to traditional sources of capital and other possible barriers. It attempts to foresee some potential barriers and underscore the real complexity of issues that arise when development and entrepreneurship are linked.

Details

Journal of Enterprising Communities: People and Places in the Global Economy, vol. 2 no. 2
Type: Research Article
ISSN: 1750-6204

Keywords

Article
Publication date: 1 March 1994

Marc Cowling and Nick Clay

The Loan Guarantee Scheme (LGS) has, for the last thirteen years, been the foremost government initiative concerned with the financing of small businesses. It was developed to…

Abstract

The Loan Guarantee Scheme (LGS) has, for the last thirteen years, been the foremost government initiative concerned with the financing of small businesses. It was developed to alleviate some of the fundamental problems that smaller firms face when seeking finance due to a lack of loan security, and the fact that some 33,500 firms have obtained funding under the scheme is an indicator of its success. The study uses econometric techniques to identify the influential determinants of LGS take‐up and failure rates. The results show that the two scheme parameters, the interest rate premium and the proportion of the loan guaranteed, were the key determinants of take‐up. On the other hand, failure rates were influenced by liquidity (cash flow), interest rates and other macroeconomic factors. We conclude that the government can directly influence the level of take‐up on the LGS by adjusting the two key parameters, namely the premium and the guarantee.

Details

Journal of Small Business and Enterprise Development, vol. 1 no. 3
Type: Research Article
ISSN: 1462-6004

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