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Entrepreneurship: Origins and Returns

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Author Info

  • Berglann, Helge

    ()
    (Norwegian Agricultural Economics Research Institute (NILF))

  • Moen, Espen R.

    ()
    (Norwegian Business School (BI))

  • Røed, Knut

    ()
    (Ragnar Frisch Centre for Economic Research)

  • Skogstrøm, Jens Fredrik

    ()
    (Ragnar Frisch Centre for Economic Research)

Abstract

We examine the origins and outcome of entrepreneurship on the basis of exceptionally comprehensive Norwegian matched worker-firm-owner data. In contrast to most existing studies, our notion of entrepreneurship not only comprises self-employment, but also employment in partly self-owned limited liability firms. Based on this extended entrepreneurship concept, we find that entrepreneurship tends to be profitable. It also raises income uncertainty, but the most successful quartile gains much more than the least successful quartile loses. Key determinants of the decision to become an entrepreneur are occupational qualifications, family resources, gender, and work environments. Individual unemployment encourages, while aggregate unemployment discourages entrepreneurship.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4250.

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Length: 34 pages
Date of creation: Jun 2009
Date of revision:
Publication status: published in: Labour Economics, 2011, 18 (2), 180-193
Handle: RePEc:iza:izadps:dp4250

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Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
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Web page: http://www.iza.org

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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
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Keywords: self-employment; entrepreneurship; spin-offs;

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References

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  1. von Greiff, Jenny, 2009. "Displacement and self-employment entry," Labour Economics, Elsevier, vol. 16(5), pages 556-565, October.
  2. Paul Gompers & Josh Lerner & David Scharfstein, 2005. "Entrepreneurial Spawning: Public Corporations and the Genesis of New Ventures, 1986 to 1999," Journal of Finance, American Finance Association, vol. 60(2), pages 577-614, 04.
  3. Raaum, Oddbjørn & Bratsberg, Bernt & Røed, Knut & Österbacka , Eva & Eriksson, Tor & Jäntti, Markus & Naylor, Robin, 2007. "Marital Sorting, Household Labor Supply, and Intergenerational Earnings Mobility across Countries," Memorandum 17/2007, Oslo University, Department of Economics.
  4. C. Praag & Peter Versloot, 2007. "What is the value of entrepreneurship? A review of recent research," Small Business Economics, Springer, vol. 29(4), pages 351-382, December.
  5. Bratsberg, Bernt & Raaum, Oddbjørn & Røed, Knut, 2007. "When Minority Labor Migrants Meet the Welfare State," IZA Discussion Papers 2872, Institute for the Study of Labor (IZA).
  6. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, Fall.
  7. Santarelli, Enrico & Vivarelli, Marco, 2006. "Entrepreneurship and the Process of Firms’ Entry, Survival and Growth," IZA Discussion Papers 2475, Institute for the Study of Labor (IZA).
  8. Sergio Firpo, 2007. "Efficient Semiparametric Estimation of Quantile Treatment Effects," Econometrica, Econometric Society, vol. 75(1), pages 259-276, 01.
  9. Iyigun, Murat F & Owen, Ann L, 1998. "Risk, Entrepreneurship, and Human-Capital Accumulation," American Economic Review, American Economic Association, vol. 88(2), pages 454-57, May.
  10. HansK. Hvide, 2009. "The Quality of Entrepreneurs," Economic Journal, Royal Economic Society, vol. 119(539), pages 1010-1035, 07.
  11. S. Klepper & S. Sleeper, 2002. "Entry by Spinoffs," Papers on Economics and Evolution 2002-07, Max Planck Institute of Economics, Evolutionary Economics Group.
  12. repec:dgr:uvatin:2007066 is not listed on IDEAS
  13. Schumpeter, Joseph A., 1947. "The Creative Response in Economic History," The Journal of Economic History, Cambridge University Press, vol. 7(02), pages 149-159, November.
  14. Hellmann, Thomas F., 2002. "When Do Employees Become Entrepreneurs?," Research Papers 1770, Stanford University, Graduate School of Business.
  15. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
  16. Justin van der Sluis & Mirjam van Praag & Wim Vijverberg, 2008. "Education And Entrepreneurship Selection And Performance: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 795-841, December.
  17. Ari Hyytinen & Mika Maliranta, 2008. "When Do Employees Leave Their Job for Entrepreneurship?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(1), pages 1-21, 03.
  18. Hyytinen, Ari & Maliranta, Mika, 2006. "When Do Employees Leave Their Job for Entrepreneurship: Evidence from Linked Employer-Employee Data," Discussion Papers 1023, The Research Institute of the Finnish Economy.
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Citations

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Cited by:
  1. Baltzopoulos, Apostolos & Braunerhjelm, Pontus & Tikoudis, Ioannis, 2012. "Spin-off: Individual, Firm, Industry and Regional Determinants," Working Paper Series in Economics and Institutions of Innovation 265, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  2. Åstebro, Thomas & Chen, Jing, 2014. "The entrepreneurial earnings puzzle: Mismeasurement or real?," Journal of Business Venturing, Elsevier, vol. 29(1), pages 88-105.
  3. Hyytinen, Ari & Ilmakunnas, Pekka & Toivanen, Otto, 2013. "The return-to-entrepreneurship puzzle," Labour Economics, Elsevier, vol. 20(C), pages 57-67.
  4. Thomas �stebro & Pontus Braunerhjelm & Anders Broström, 2013. "Does academic entrepreneurship pay?," Industrial and Corporate Change, Oxford University Press, vol. 22(1), pages 281-311, February.
  5. Amanor-Boadu, Vincent, 2013. "Diversification Decisions in Agriculture: The Case of Agritourism in Kansas," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 16(2).
  6. Lionel Désiage, 2010. "What are Entrepreneurs’ Objectives When Starting a New Business?," TEPP Working Paper 2010-06, TEPP.
  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. Joanna Nestorowicz & Joanna Tyrowicz, 2013. "Ethnic Competition or Complementarity: Which Drives (Returns to) Self-employment?," Working Papers 2013-15, Faculty of Economic Sciences, University of Warsaw.
  9. Peter Chinloy & Daniel Winkler, 2012. "Contracts, Individual Revenue and Performance," Journal of Labor Research, Springer, vol. 33(4), pages 545-562, December.
  10. Gohmann, Stephan F. & Fernandez, Jose M., 2014. "Proprietorship and unemployment in the United States," Journal of Business Venturing, Elsevier, vol. 29(2), pages 289-309.
  11. Røed, Knut & Skogstrøm, Jens Fredrik, 2013. "Unemployment Insurance and Entrepreneurship," IZA Discussion Papers 7121, Institute for the Study of Labor (IZA).
  12. repec:tep:teppwp:wp1006 is not listed on IDEAS

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