IDEAS home Printed from https://ideas.repec.org/a/spr/eurasi/v4y2014i1d10.1007_s40821-014-0003-z.html
   My bibliography  Save this article

Solo self-employed versus employer entrepreneurs: determinants and macro-economic effects in OECD countries

Author

Listed:
  • André Stel

    (Panteia/EIM)

  • Sander Wennekers

    (Panteia/EIM
    Erasmus University Rotterdam)

  • Gerard Scholman

    (Panteia/EIM)

Abstract

We estimate an extended version of the three-equation model of Carree et al. (Small Bus Econ 19(3):271–290, 2002) where deviations from the ‘equilibrium’ rate of self-employment play a central role determining both the growth of self-employment and the rate of economic growth. In particular, we distinguish between solo self-employed and employer entrepreneurs, and allow for different ‘equilibrium’ relationships of these two types of independent entrepreneurship with the level of economic development. In addition, we also allow for different economic growth penalties of deviating from the ‘equilibrium’ rate for these two types. Using data for 26 OECD countries over the period 1992–2008, we find that the ‘equilibrium’ rate of solo self-employment seems to be independent of the level of economic development, whereas the ‘equilibrium’ rate of employer entrepreneurship is negatively related to economic development. Regarding the impact of deviating from the ‘equilibrium’ solo self-employment rate, we find that both positive and negative deviations diminish economic growth. For employer entrepreneurship we do not find such a growth penalty.

Suggested Citation

  • André Stel & Sander Wennekers & Gerard Scholman, 2014. "Solo self-employed versus employer entrepreneurs: determinants and macro-economic effects in OECD countries," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 4(1), pages 107-136, June.
    • Handle: RePEc:spr:eurasi:v:4:y:2014:i:1:d:10.1007_s40821-014-0003-z
    DOI: 10.1007/s40821-014-0003-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40821-014-0003-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40821-014-0003-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mirjam Praag & André Stel, 2013. "The more business owners, the merrier? The role of tertiary education," Small Business Economics, Springer, vol. 41(2), pages 335-357, August.
    2. David B. Audretsch & Isabel Grilo & A. Roy Thurik (ed.), 2007. "Handbook of Research on Entrepreneurship Policy," Books, Edward Elgar Publishing, number 3856.
    3. David B. Audretsch & Martin A. Carree & Adriaan J. Van Stel & A. Roy Thurik, 2002. "Impeded Industrial Restructuring: The Growth Penalty," Kyklos, Wiley Blackwell, vol. 55(1), pages 81-98.
    4. Wennekers, Sander & van Stel, André & Carree, Martin & Thurik, Roy, 2010. "The Relationship between Entrepreneurship and Economic Development: Is It U-Shaped?," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 6(3), pages 167-237, July.
    5. Giovanni Dosi & Richard Nelson, 2013. "The Evolution of Technologies: An Assessment of the State-of-the-Art," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 3-46, June.
    6. Sander Wennekers & André Stel & Roy Thurik & Paul Reynolds, 2008. "Nascent entrepreneurship and the level of economic development," Small Business Economics, Springer, vol. 30(3), pages 325-325, March.
    7. Martin Carree & André Van Stel & Roy Thurik & Sander Wennekers, 2007. "The relationship between economic development and business ownership revisited," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 19(3), pages 281-291, May.
    8. Janos Kornai, 2006. "The Great Transformation Of Central Eastern Europe: Success And Disappointment - First Published," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 2(4), pages 11-38.
    9. Andre van Stel, "undated". "COMPENDIA: Harmonizing business ownership data across countries and over time," Papers on Entrepreneurship, Growth and Public Policy 2005-05, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    10. André van Stel & Chantal Hartog & J. Cieslik Cieslik, 2010. "Measuring Business Ownership Across Countries and Over Time: Extending the COMPENDIA Data Base," Scales Research Reports H201019, EIM Business and Policy Research.
    11. Pellegrino, Gabriele & Piva, Mariacristina & Vivarelli, Marco, 2012. "Young firms and innovation: A microeconometric analysis," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 329-340.
    12. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
    13. Pierre Mohnen & Bronwyn Hall, 2013. "Innovation and Productivity: An Update," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 47-65, June.
    14. Francesca Lotti & Enrico Santarelli & Marco Vivarelli, 2003. "Does Gibrat's Law hold among young, small firms?," Journal of Evolutionary Economics, Springer, vol. 13(3), pages 213-235, August.
    15. David B. Audretsch & Isabel Grilo & A. Roy Thurik, 2007. "Explaining Entrepreneurship and the Role of Policy: A Framework," Chapters, in: David B. Audretsch & Isabel Grilo & A. Roy Thurik (ed.), Handbook of Research on Entrepreneurship Policy, chapter 1, Edward Elgar Publishing.
    16. André Stel & Martin Carree & Roy Thurik, 2005. "The Effect of Entrepreneurial Activity on National Economic Growth," Small Business Economics, Springer, vol. 24(3), pages 311-321, February.
    17. Smallbone, David & Welter, Friederike, 2001. "The Distinctiveness of Entrepreneurship in Transition Economies," Small Business Economics, Springer, vol. 16(4), pages 249-262, June.
    18. Audretsch, David B, et al, 2002. "Impeded Industrial Restructuring: The Growth Penalty," Kyklos, Wiley Blackwell, vol. 55(1), pages 81-97.
    19. János Kornai, 2008. "The Great Transformation of Central Eastern Europe: Success and Disappointment," International Economic Association Series, in: János Kornai & László Mátyás & Gérard Roland (ed.), Institutional Change and Economic Behaviour, chapter 1, pages 1-37, Palgrave Macmillan.
    20. André van Stel & Roy Thurik & Chantal Hartog & Simon Parker, 2010. "The two-way relationship between entrepreneurship and economic performance," Scales Research Reports H200822, EIM Business and Policy Research.
    21. David Audretsch & Max Keilbach, 2004. "Entrepreneurship Capital and Economic Performance," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 949-959.
    22. Emilio Congregado & Antonio Golpe & André Stel, 2014. "The role of scale economies in determining firm size in modern economies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 431-455, March.
    23. Ghoshal, Sumantra & Hahn, Martin & Moran, Peter, 1999. "Management Competence, Firm Growth and Economic Progress," Contributions to Political Economy, Cambridge Political Economy Society, vol. 18(0), pages 121-150.
    24. Wennekers, Sander & Thurik, Roy, 1999. "Linking Entrepreneurship and Economic Growth," Small Business Economics, Springer, vol. 13(1), pages 27-55, August.
    25. Sander Wennekers, 2006. "Entrepreneurship at Country Level : Economic and Non-Economic Determinants," Scales Research Reports R200602, EIM Business and Policy Research.
    26. Concepción Román & Emilio Congregado & José Millán, 2011. "Dependent self-employment as a way to evade employment protection legislation," Small Business Economics, Springer, vol. 37(3), pages 363-392, October.
    27. Parker, Simon C, 2009. "Why do small firms produce the entrepreneurs?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(3), pages 484-494, June.
    28. Roy Thurik & Sander Wennekers & Lorraine Uhlaner, 2002. "Entrepreneurship and economic performance: a macro perspective," Scales Research Reports N200220, EIM Business and Policy Research.
    29. John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2013. "Who Creates Jobs? Small versus Large versus Young," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 347-361, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jun Wang, 2020. "Will Entrepreneurship Promote Productivity Growth in China?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(3), pages 73-89, May.
    2. Tina Haussen & Marcus Schlegel, 2020. "Unemployment reduction through solo self-employment: A gender question?," Empirical Economics, Springer, vol. 59(6), pages 3085-3105, December.
    3. Urbano, David & Aparicio, Sebastian & Guerrero, Maribel & Noguera, Maria & Torrent-Sellens, Joan, 2017. "Institutional determinants of student employer entrepreneurs at Catalan universities," Technological Forecasting and Social Change, Elsevier, vol. 123(C), pages 271-282.
    4. André van Stel & Jolanda Hessels & Tommy Span, 2014. "Global Entrepreneurship Monitor The Netherlands 2013," Scales Research Reports H201407, EIM Business and Policy Research.
    5. Prieger, James E. & Bampoky, Catherine & Blanco, Luisa R. & Liu, Aolong, 2016. "Economic Growth and the Optimal Level of Entrepreneurship," World Development, Elsevier, vol. 82(C), pages 95-109.
    6. Steffen E. Schummer & Kathleen Otto & Lena Hünefeld & Maria U. Kottwitz, 2019. "The role of need satisfaction for solo self-employed individuals’ vs. employer entrepreneurs’ affective commitment towards their own businesses," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-18, December.
    7. Stefan Schneck, 2020. "Self-employment as a source of income inequality," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(1), pages 45-64, March.
    8. Cheng, Zhiming & Smyth, Russell, 2021. "Education and migrant entrepreneurship in urban China," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 506-529.
    9. Xiaoyan Huang & Yuli Chen, 2021. "The Impact of Entrepreneurship on Economic Growth within a City," Businesses, MDPI, vol. 1(3), pages 1-9, October.
    10. Alexander Chepurenko, 2019. "‘Non-Routine Entrepreneurs’: Another Path of Realizing Entrepreneurial Intentions," Administrative Sciences, MDPI, vol. 9(2), pages 1-15, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hugo Erken & Piet Donselaar & Roy Thurik, 2018. "Total factor productivity and the role of entrepreneurship," The Journal of Technology Transfer, Springer, vol. 43(6), pages 1493-1521, December.
    2. Thurik, A. Roy & Carree, Martin A. & van Stel, André & Audretsch, David B., 2008. "Does self-employment reduce unemployment?," Journal of Business Venturing, Elsevier, vol. 23(6), pages 673-686, November.
    3. Emilio Congregado & Antonio Golpe & André Stel, 2014. "The role of scale economies in determining firm size in modern economies," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 431-455, March.
    4. Isabel Grilo & Roy Thurik, 2008. "Determinants of entrepreneurial engagement levels in Europe and the US," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(6), pages 1113-1145, December.
    5. Isabel Grilo & Roy Thurik, 2005. "Entrepreneurial engagement levels in the European Union," Papers on Entrepreneurship, Growth and Public Policy 2005-29, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    6. Prieger, James E. & Bampoky, Catherine & Blanco, Luisa R. & Liu, Aolong, 2016. "Economic Growth and the Optimal Level of Entrepreneurship," World Development, Elsevier, vol. 82(C), pages 95-109.
    7. Andreas Freytag & Roy Thurik, 2010. "Entrepreneurship and its Determinants in a Cross-Country Setting," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 157-170, Springer.
    8. André van Stel & J. Cieslik Cieslik, 2014. "Trends in Business Ownership in Central and East European Transition Economies," Scales Research Reports H201202, EIM Business and Policy Research.
    9. Fritsch, Michael, 2013. "New Business Formation and Regional Development: A Survey and Assessment of the Evidence," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 9(3), pages 249-364, February.
    10. Michael Fritsch, 2011. "The effect of new business formation on regional development - Empirical evidence, interpretation, and avenues for further research," Jena Economics Research Papers 2011-006, Friedrich-Schiller-University Jena.
    11. Francesco Quatraro & Marco Vivarelli, 2015. "Drivers of Entrepreneurship and Post-entry Performance of Newborn Firms in Developing Countries," The World Bank Research Observer, World Bank, vol. 30(2), pages 277-305.
    12. Sander Wennekers & Roy Thurik & André Stel & Niels Noorderhaven, 2010. "Uncertainty Avoidance and the Rate of Business Ownership Across 21 OECD Countries, 1976–2004," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 271-299, Springer.
    13. Roy Thurik & Marcus Dejardin, 2012. "Entrepreneurship and Culture," Post-Print halshs-00943684, HAL.
    14. Jolanda Hessels & Marco Gelderen & Roy Thurik, 2008. "Entrepreneurial aspirations, motivations, and their drivers," Small Business Economics, Springer, vol. 31(3), pages 323-339, October.
    15. Pekka Stenholm & Zoltán J. Ács & Robert Wuebker, 2015. "Exploring country-level institutional arrangements on the rate and type of entrepreneurial activity," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 20, pages 387-404, Edward Elgar Publishing.
    16. Jose Ernesto Amoros, 2009. "Entrepreneurship and Quality of Institutions: A Developing-Country Approach," WIDER Working Paper Series RP2009-07, World Institute for Development Economic Research (UNU-WIDER).
    17. Mirjam Praag & André Stel, 2013. "The more business owners, the merrier? The role of tertiary education," Small Business Economics, Springer, vol. 41(2), pages 335-357, August.
    18. Marco Vivarelli, 2013. "Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(6), pages 1453-1495, December.
    19. Salustiano Martínez-Fierro & José María Biedma-Ferrer & José Ruiz-Navarro, 2016. "Entrepreneurship and strategies for economic development," Small Business Economics, Springer, vol. 47(4), pages 835-851, December.
    20. Ondřej Dvouletý & Alisa Gordievskaya & David Anthony Procházka, 2018. "Investigating the relationship between entrepreneurship and regional development: case of developing countries," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 8(1), pages 1-9, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:eurasi:v:4:y:2014:i:1:d:10.1007_s40821-014-0003-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.