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Self-employment duration in urban and rural locations

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  • Mika Haapanen
  • Hannu Tervo

Abstract

Previous research has shown that the local environment is important for self-employment. The dynamics of self-employment varies between areas characterized by different labour market conditions, entrepreneurial traditions and other structural factors. This article analyses self-employment spells in Finland with a large register-based data set from the period 1987 to 2002. The main aim is to investigate the role of region-specific factors as compared with individual-specific and other factors on the duration of self-employment spells. First, the descriptive analysis shows that the exit rates from self-employment and the length of self-employment spells depend upon location (urban versus rural area) and the cyclical trends in the economy. Second, self-employment duration is modelled using discrete time survival analysis. It is found that rural areas have significantly lower exit rates in the first years of self-employment than urban areas.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 41 (2009)
Issue (Month): 19 ()
Pages: 2449-2461

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Handle: RePEc:taf:applec:v:41:y:2009:i:19:p:2449-2461

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  1. Carrasco, Raquel, 1999. " Transitions to and from Self-employment in Spain: An Empirical Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 315-41, August.
  2. Holtz-Eakin, Douglas & Joulfaian, David & Rosen, Harvey S, 1994. "Sticking It Out: Entrepreneurial Survival and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 53-75, February.
  3. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632.
  4. Aki Kangasharju, 2002. "The Role of Education in Self-Employment Success in Finland," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 33(2), pages 216-237.
  5. Blanchflower, David G., 2000. "Self-employment in OECD countries," Labour Economics, Elsevier, vol. 7(5), pages 471-505, September.
  6. Raquel Carrasco & Mette Ejrnæs, 2003. "Self-employment in Denmark and Spain: Institution, Economic Conditions and Gender differences," CAM Working Papers 2003-06, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  7. Taylor, Mark P, 1999. "Survival of the Fittest? An Analysis of Self-Employment Duration in Britain," Economic Journal, Royal Economic Society, vol. 109(454), pages C140-55, March.
  8. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
  9. Sueyoshi, Glenn T, 1995. "A Class of Binary Response Models for Grouped Duration Data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(4), pages 411-31, Oct.-Dec..
  10. Ritsila, Jari & Tervo, Hannu, 2002. " Effects of Unemployment on New Firm Formation: Micro-level Panel Data Evidence from Finland," Small Business Economics, Springer, vol. 19(1), pages 31-40, August.
  11. Aki Kangasharju & Sari Pekkala, 2001. "The Role of Education in Self-Employment Success," Studies in Economics 0116, Department of Economics, University of Kent.
  12. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-82, July.
  13. Jenkins, Stephen P, 1995. "Easy Estimation Methods for Discrete-Time Duration Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(1), pages 129-38, February.
  14. Hannu Niittykangas & Hannu Tervo, 2005. "Spatial variations in intergenerational transmission of self-employment," Regional Studies, Taylor & Francis Journals, vol. 39(3), pages 319-332.
  15. Hannu Tervo, 2004. "Self-employment dynamics in rural and urban labour markets," ERSA conference papers ersa04p396, European Regional Science Association.
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Citations

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Cited by:
  1. André van Stel & José Maria Millán & Concepcion Roman, 2013. "Investigating the impact of the technological environment on survival chances of employer entrepreneurs," Scales Research Reports H201208, EIM Business and Policy Research.
  2. Oberschachtsiek, Dirk, 2010. "How do local labor market conditions and individual characteristics affect quitting selfemployment?," Discussion Papers, Presidential Department P 2010-001, Social Science Research Center Berlin (WZB).
  3. 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.
  4. repec:dgr:uvatin:2011066 is not listed on IDEAS
  5. Hyytinen, Ari & Rouvinen, Petri, 2008. "The labour market consequences of self-employment spells: European evidence," Labour Economics, Elsevier, vol. 15(2), pages 246-271, April.
  6. Dirk Oberschachtsiek, 2012. "The experience of the founder and self-employment duration: a comparative advantage approach," Small Business Economics, Springer, vol. 39(1), pages 1-17, July.
  7. Vera Rocha & Anabela Carneiro & Celeste Amorim Varum, 2013. "Entrepreneurship Dynamics: Entry Routes, Business-Owner's Persistence and Exit Modes," CEF.UP Working Papers 1310, Universidade do Porto, Faculdade de Economia do Porto.
  8. José Millán & Emilio Congregado & Concepción Román, 2012. "Determinants of self-employment survival in Europe," Small Business Economics, Springer, vol. 38(2), pages 231-258, February.
  9. Millán, José María & Congregado, Emilio & Román, Concepción, 2014. "Persistence in entrepreneurship and its implications for the European entrepreneurial promotion policy," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 83-106.
  10. Klaesson, Johan & Larsson, Johan P, 2014. "Education and Self-employment Propensity," Working Paper Series in Economics and Institutions of Innovation 345, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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