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Unemployment and business formation rates: reconciling time-series and cross-section evidence

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  • R T Hamilton
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    Abstract

    Time-series analyses generally show rates of business formation increasing with unemployment. In cross-section studies the areas with the highest rates of formation are generally those with the lowest levels of unemployment. In a study using both types of data, the negative cross-section relationship is confirmed but it is suggested that the time-series may be nonlinear, becoming negative at a critical unemployment level around 20%. The paper concludes with a reconciliation of these findings.

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    Bibliographic Info

    Article provided by Pion Ltd, London in its journal Environment and Planning A.

    Volume (Year): 21 (1989)
    Issue (Month): 2 (February)
    Pages: 249-255

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    Handle: RePEc:pio:envira:v:21:y:1989:i:2:p:249-255

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    Web page: http://www.pion.co.uk

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    Cited by:
    1. Mathilde Aubry & Jean Bonnet & Patricia Renou-Maissant, 2013. "Business cycle and entrepreneurial behavior using French regional data," Economics Working Paper Archive (University of Rennes 1 & University of Caen), Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS 201304, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
    2. Marco Vivarelli, 2013. "Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries," Industrial and Corporate Change, Oxford University Press, vol. 22(6), pages 1453-1495, December.
    3. Enrico Santarelli & Marco Vivarelli, 2007. "Entrepreneurship and the process of firms’ entry, survival and growth," Industrial and Corporate Change, Oxford University Press, vol. 16(3), pages 455-488, June.
    4. André van Stel & Roy Thurik & David Audretsch & Martin Carree, 2007. "Does Self-Employment Reduce Unemployment?," Scales Research Reports, EIM Business and Policy Research H200709, EIM Business and Policy Research.
    5. Millán, José María & Congregado, Emilio & Román, Concepción, 2010. "Determinants of Self-Employment Dynamics and their Implications on Entrepreneurial Policy Effectiveness," REVISTA LECTURAS DE ECONOMÍA, UNIVERSIDAD DE ANTIOQUIA - CIE.
    6. Sander Wennekers & Roy Thurik & André Stel & Niels Noorderhaven, 2007. "Uncertainty avoidance and the rate of business ownership across 21 OECD countries, 1976–2004," Journal of Evolutionary Economics, Springer, Springer, vol. 17(2), pages 133-160, April.
    7. Giacomin, Olivier & Janssen, Frank & Guyot, Jean-luc & Lohest, Olivier, 2011. "Opportunity and/or necessity entrepreneurship? The impact of the socio-economic characteristics of entrepreneurs," MPRA Paper 29506, University Library of Munich, Germany.

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