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Attributes influencing self-employment propensity in urban and rural Sweden

Author

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  • Kent Eliasson
  • Hans Westlund

Abstract

Policies aiming at promoting entrepreneurship are in general formed on national levels, without any consideration of differences between urban and rural areas. Usually, cities are provided with better and more modern infrastructure; cities have better supply of physical, financial and human capital, and connected services, and cities have a more modern industrial structure in the sense that their shares of growing industry are higher. Thus, it is possible that policies for entrepreneurship, which in general are designed for urban areas, might be less effective when they are implemented in rural areas. A first step to test the validity of this hypothesis could be to investigate the differences between cities and countryside regarding self-employment propensity and factors affecting the choice to become self-employed. Based on an exceptionally rich data set containing very detailed socio-economic and geographical information on all residents in Sweden, this paper examines: (a) the scope and structure of self-employment propensity in urban and rural areas, respectively, in Sweden, divided into full-time and part-time self-employment, and (b) the importance of a number of attributes that may have an impact on individuals’ propensity to start an enterprise in the two area types. Variables being tested are connected to demography and education, labor market status, plant characteristics, self-employment experience, financial resources, family links and regional attributes. The main results indicate that self-employment entry is influenced by the same factors in the same way in urban and rural areas. However, countryside’s industrial structure has a smaller share of growing industries. The fact that countryside’s startups follow the existing industrial structure means that this “modernity gap” between densely built up areas and countryside remains. From a policy perspective, this must be seen as a serious problem for countryside’s growth potential. This gives an argument for designing a special entrepreneurship policy for the countryside in order to increase its share of growing trades and thereby modernize its industrial structure. Copyright Springer-Verlag 2013

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  • Kent Eliasson & Hans Westlund, 2013. "Attributes influencing self-employment propensity in urban and rural Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(2), pages 479-514, April.
    • Handle: RePEc:spr:anresc:v:50:y:2013:i:2:p:479-514
    DOI: 10.1007/s00168-012-0501-9
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    3. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    4. Schulz, Matthias & Urbig, Diemo & Procher, Vivien, 2016. "Hybrid entrepreneurship and public policy: The case of firm entry deregulation," Journal of Business Venturing, Elsevier, vol. 31(3), pages 272-286.
    5. Philippe Rouchy & Sam Tavassoli & Joakim Wernberg, 2021. "Heterogeneous hybrid entrepreneurs - framing the variation in entrepreneurial effort and motives for hybrid entrepreneurship," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 42(1/2), pages 115-129.
    6. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    7. Eva Coll‐Martínez & Elisenda Jové‐Llopis & Mercedes Teruel, 2022. "The city of start‐ups: Location determinants of start‐ups in emergent industries in Barcelona," Growth and Change, Wiley Blackwell, vol. 53(2), pages 972-1007, June.
    8. Heike Delfmann & Sierdjan Koster, 2016. "The effect of new business creation on employment growth in regions facing population decline," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 33-54, January.
    9. Hannu Tervo, 2014. "Who turns to entrepreneurship later in life? - Push and pull in Finnish rural and urban areas," ERSA conference papers ersa14p236, European Regional Science Association.
    10. Paulina Rytkönen & Håkan Tunón, 2020. "Summer Farmers, Diversification and Rural Tourism—Challenges and Opportunities in the Wake of the Entrepreneurial Turn in Swedish Policies (1991–2019)," Sustainability, MDPI, vol. 12(12), pages 1-26, June.
    11. Hans Westlund & Johan Larsson & Amy Rader Olsson, 2013. "Political entrepreneurship and local development in Swedish municipalities," ERSA conference papers ersa13p151, European Regional Science Association.
    12. Niclas Lavesson, 2018. "How does distance to urban centres influence necessity and opportunity‐based firm start‐ups?," Papers in Regional Science, Wiley Blackwell, vol. 97(4), pages 1279-1303, November.
    13. Amy Rader Olsson & Hans Westlund & Johan P. Larsson, 2020. "Entrepreneurial Governance and Local Growth," Sustainability, MDPI, vol. 12(9), pages 1-16, May.
    14. Hans Westlund & Johan P. Larsson & Amy Rader Olsson, 2014. "Start-ups and Local Entrepreneurial Social Capital in the Municipalities of Sweden," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 974-994, June.
    15. Joanna Woronkowicz & Douglas S. Noonan, 2019. "Who Goes Freelance? The Determinants of Self-Employment for Artists," Entrepreneurship Theory and Practice, , vol. 43(4), pages 651-672, July.
    16. Heike Delfmann & Sierdjan Koster, 2016. "The effect of new business creation on employment growth in regions facing population decline," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 33-54, January.

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    More about this item

    Keywords

    M13; O18; R12;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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