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Do freelance independent contractors promote entrepreneurship?

Author

Listed:
  • Andrew Burke

    (University of Dublin)

  • Imran Zawwar

    (Cranfield University)

  • Stephanie Hussels

    (Cranfield University)

Abstract

We investigate whether or not the level of entrepreneurial activity in an economy is determined by the availability of freelance independent contractors in the workforce. We develop hypotheses and test them through an analysis of 75 countries from 2002 to 2012 using the Global Entrepreneurship Monitor (GEM) database. We find freelance independent contractors promote entrepreneurial activity where typically a 10% rise in the freelance workforce causes about a 1% increase in entrepreneurial activity. The significance of this positive effect is robust for both necessity and opportunity-driven entrepreneurial types and across innovation-driven and efficiency-driven economies—but it is stronger in innovation-driven economies and also for necessity entrepreneurship. It implies that having a flexible workforce is a key ingredient to having an entrepreneurial economy. Furthermore, it indicates that orthodox research and public policy perspectives which overlook the importance of freelance independent contractors for entrepreneurship activity require a re-appraisal.

Suggested Citation

  • Andrew Burke & Imran Zawwar & Stephanie Hussels, 2020. "Do freelance independent contractors promote entrepreneurship?," Small Business Economics, Springer, vol. 55(2), pages 415-427, August.
    • Handle: RePEc:kap:sbusec:v:55:y:2020:i:2:d:10.1007_s11187-019-00242-w
    DOI: 10.1007/s11187-019-00242-w
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    2. Ivona Huđek & Polona Tominc & Karin Širec, 2021. "The Human Capital of the Freelancers and Their Satisfaction with the Quality of Life," Sustainability, MDPI, vol. 13(20), pages 1-23, October.

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    More about this item

    Keywords

    Freelancers; Contractors; Enabling entrepreneurship; Promoting entrepreneurship; Entrepreneurial activity;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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