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‘Entrepreneurs out of necessity’: a snapshot

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  • Markus Poschke

Abstract

‘Entrepreneurs out of necessity’ as identified by the Global Entrepreneurship Monitor (GEM) survey are a sizeable group across countries. This article documents that they tend to have low education, run smaller firms, expect their firms to grow less, but are likely to stay in the market. This evidence matters for policy supporting small businesses. It is a challenge for existing theories of heterogeneous firms and points to the importance of heterogeneous outside options.

Suggested Citation

  • Markus Poschke, 2013. "‘Entrepreneurs out of necessity’: a snapshot," Applied Economics Letters, Taylor & Francis Journals, vol. 20(7), pages 658-663, May.
  • Handle: RePEc:taf:apeclt:v:20:y:2013:i:7:p:658-663
    DOI: 10.1080/13504851.2012.727968
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    References listed on IDEAS

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    1. Paul Reynolds & Niels Bosma & Erkko Autio & Steve Hunt & Natalie De Bono & Isabel Servais & Paloma Lopez-Garcia & Nancy Chin, 2005. "Global Entrepreneurship Monitor: Data Collection Design and Implementation 1998–2003," Small Business Economics, Springer, vol. 24(3), pages 205-231, February.
    2. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    3. Ellen R. Rissman, 2003. "Self-employment as an alternative to unemployment," Working Paper Series WP-03-34, Federal Reserve Bank of Chicago.
    4. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters,in: New Developments in Productivity Analysis, pages 303-372 National Bureau of Economic Research, Inc.
    5. Silvia Ardagna & Annamaria Lusardi, 2010. "Explaining International Differences in Entrepreneurship: The Role of Individual Characteristics and Regulatory Constraints," NBER Chapters,in: International Differences in Entrepreneurship, pages 17-62 National Bureau of Economic Research, Inc.
    6. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    7. Nickell, Stephen J, 1979. "Estimating the Probability of Leaving Unemployment," Econometrica, Econometric Society, vol. 47(5), pages 1249-1266, September.
    8. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-1150, September.
    9. 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.
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    Citations

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    Cited by:

    1. Ranasinghe, Ashantha, 2017. "Property rights, extortion and the misallocation of talent," European Economic Review, Elsevier, vol. 98(C), pages 86-110.
    2. Jolanda Hessels & Peter van der Zwan, 2013. "Start-up motivation and (in)voluntary exit," Scales Research Reports H201309, EIM Business and Policy Research.
    3. Poschke, Markus, 2013. "The Decision to Become an Entrepreneur and the Firm Size Distribution: A Unifying Framework for Policy Analysis," IZA Discussion Papers 7757, Institute for the Study of Labor (IZA).
    4. Bartz, Wiebke & Winkler, Adalbert, 2016. "Flexible or fragile? The growth performance of small and young businesses during the global financial crisis — Evidence from Germany," Journal of Business Venturing, Elsevier, vol. 31(2), pages 196-215.
    5. Monica C. Diochon & Alistair R. Anderson & Yogesh Ghore, 2017. "Microfranchise emergence and its impact on entrepreneurship," International Entrepreneurship and Management Journal, Springer, vol. 13(2), pages 553-574, June.
    6. repec:eee:jeborg:v:145:y:2018:i:c:p:275-293 is not listed on IDEAS
    7. Poschke, Markus, 2013. "Who becomes an entrepreneur? Labor market prospects and occupational choice," Journal of Economic Dynamics and Control, Elsevier, vol. 37(3), pages 693-710.
    8. Hadi Salehi Esfahani & Roksana Bahramitash, 2015. "Gender, Enterprise Ownership, and Labor Allocation in MENA: the Roles of Islam, Oil, and Government Policies," Working Papers 951, Economic Research Forum, revised Sep 2015.
    9. Falco, Paolo & Maloney, William F. & Rijkers, Bob & Sarrias, Mauricio, 2015. "Heterogeneity in subjective wellbeing: An application to occupational allocation in Africa," Journal of Economic Behavior & Organization, Elsevier, vol. 111(C), pages 137-153.
    10. Bögenhold, Dieter & Fachinger, Uwe, 2013. "Weibliche Solo-Selbstständigkeit zwischen Notwendigkeit und Innovationsherausforderung: Beobachtungen über Geschlecht und Unternehmertum in Deutschland
      [Female Solo-Self-Employment Between Necessit
      ," MPRA Paper 51460, University Library of Munich, Germany.
    11. repec:kap:sbusec:v:49:y:2017:i:4:d:10.1007_s11187-017-9857-7 is not listed on IDEAS
    12. Hazarika, Bhabesh & Goswami, Kishor, 2014. "Rural Non-Farm Micro-Entrepreneurship or Not: Gender Issue in Decision Making," EconStor Conference Papers 125611, ZBW - German National Library of Economics.
    13. Burchell, Brendan. & Coutts, Adam. & Hall, Edward. & Pye, Nick., 2015. "Self-employment programmes for young people : a review of the context, policies and evidence," ILO Working Papers 994898993402676, International Labour Organization.
    14. Falco, Paolo & Haywood, Luke, 2016. "Entrepreneurship versus joblessness: Explaining the rise in self-employment," Journal of Development Economics, Elsevier, vol. 118(C), pages 245-265.
    15. Sotiris Blanas & Adnan Seric & Christian Viegelahn, 2017. "Jobs, FDI and Institutions in Sub-Saharan Africa: Evidence from Firm-Level Data," Working Papers 152465485, Lancaster University Management School, Economics Department.

    More about this item

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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