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Job Creation by the Self-employed: The Roles of Entrepreneurial and Financial Capital

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  • Andrew Henley

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Abstract

The paper reports micro-econometric evidence on the factors that influence the ability of the small businesses to create employment. It uses data on self-employment from a British panel survey. In particular it investigates the contributions of financial and entrepreneurial capital to job creation. Housing wealth appears to be significantly associated with small business job creation. It appears to act as an important source of financial collateral. The parental background of the small business owner is also significantly associated with job creation. Successful entrepreneurs are more likely to have had self-employed parents, and in particular parents who employed others. Educational attainment, in particular at degree level, is also important. The preferred model incorporates individual random effects and the significance of these suggests the importance of unobserved latent entrepreneurial ability. Copyright Springer 2005

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Bibliographic Info

Article provided by Springer in its journal Small Business Economics.

Volume (Year): 25 (2005)
Issue (Month): 2 (09)
Pages: 175-196

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Handle: RePEc:kap:sbusec:v:25:y:2005:i:2:p:175-196

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Web page: http://www.springerlink.com/link.asp?id=100338

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  5. Black, Jane & de Meza, David & Jeffreys, David, 1996. "House Price, the Supply of Collateral and the Enterprise Economy," Economic Journal, Royal Economic Society, vol. 106(434), pages 60-75, January.
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  8. Burke, Andrew E & FitzRoy, Felix R & Nolan, Michael A, 2000. " When Less Is More: Distinguishing between Entrepreneurial Choice and Performance," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 62(5), pages 565-87, December.
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  11. Holtz-Eakin, D. & Joulfaian, D. & Rosen, H.S., 1992. "Entrepreneurial Decisions and Liquidity Constraints," Papers 129, Princeton, Department of Economics - Financial Research Center.
  12. Cowling, Marc & Mitchell, Peter, 1997. "The Evolution of U.K. Self-Employment: A Study of Government Policy and the Role of the Macroeconomy," The Manchester School of Economic & Social Studies, University of Manchester, vol. 65(4), pages 427-42, September.
  13. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
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  15. Taylor, Mark P, 1999. "Self-Employment and Windfall Gains in Britain: Evidence From Panel Data," CEPR Discussion Papers 2084, C.E.P.R. Discussion Papers.
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Citations

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Cited by:
  1. José María Millán & Emilio Congregado & Concepción Román, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 45-76.
  2. Giuliano Guerra, 2011. "The Role of Job Satisfaction in Transitions into Self-Employment," Quaderni della facoltà di Scienze economiche dell'Università di Lugano 1201, USI Università della Svizzera italiana.
  3. Mathur, Aparna, 2006. "Health Insurance and Job Creation by the Self-Employed," Working paper 375, Regulation2point0.
  4. Eichhorst, Werner & Kahanec, Martin & Kendzia, Michael J. & Wehner, Caroline & al., et, 2013. "Report No. 54: Social Protection Rights of Economically Dependent Self-employed Workers," IZA Research Reports 54, Institute for the Study of Labor (IZA).
  5. Morgan, Horatio M., 2013. "Credit Unions, Consolidation and Small Business Lending: Evidence from Canada," MPRA Paper 50813, University Library of Munich, Germany.
  6. Tammy Rogers, 2012. "Bank market structure and entrepreneurship," Small Business Economics, Springer, vol. 39(4), pages 909-920, November.
  7. Kameliia Petrova, 2012. "Part-time entrepreneurship and financial constraints: evidence from the Panel Study of Entrepreneurial Dynamics," Small Business Economics, Springer, vol. 39(2), pages 473-493, September.
  8. Morgan, Horatio M., 2013. "Credit Unions, Consolidation and Business Formation: Evidence from Canadian provinces," MPRA Paper 52327, University Library of Munich, Germany.
  9. André van Stel & José Maria Millán & Concepcion Roman & Ana Millán, 2013. "How does employment protection legislation influence hiring and firing decisions by the smallest firms?," Scales Research Reports H201216, EIM Business and Policy Research.
  10. Darja Reuschke, 2011. "Self-Employment and Geographical Mobility in Germany," SOEPpapers on Multidisciplinary Panel Data Research 417, DIW Berlin, The German Socio-Economic Panel (SOEP).
  11. Backman, Mikaela & Karlsson, Charlie, 2013. "Exploration of Wisdom Ages: Firm survival," Working Paper Series in Economics and Institutions of Innovation 339, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  12. Disney, Richard & Gathergood, John, 2009. "Housing wealth, liquidity constraints and self-employment," Labour Economics, Elsevier, vol. 16(1), pages 79-88, January.
  13. Simoes, Nadia & Moreira, Sandrina B. & Crespo, Nuno, 2013. "Individual Determinants of Self-Employment Entry – What Do We Really Know?," MPRA Paper 48403, University Library of Munich, Germany.
  14. Scott L. Newbert & Michael D. Stouder, 2011. "Justice in entrepreneurial organizations," International Journal of Social Economics, Emerald Group Publishing, vol. 38(5), pages 453-465, April.

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