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Determinants of self-employment among commuters and non-commuters

  • Backman, Mikaela

    ()

    (Centre for Entrepreneurship and Spatial Economics (CEnSE) Center for Science and Innovation Studies (CESIS), Jönköping International Business School, Jönköping, Sweden)

  • Karlsson, Charlie

    ()

    (Centre for Entrepreneurship and Spatial Economics (CEnSE) Center for Science and Innovation Studies (CESIS), Jönköping International Business School, Jönköping, Sweden)

In this paper, we analyse the determinants of the decision to become self-employed among commuters and non-commuters. In the entrepreneurship literature it is claimed that the rich-ness and quality of an individual’s business, professional and social networks play an im-portant role for the decision to become self-employed. People that commute between localities in the same region or between localities in different regions will most proba¬bly be able to develop richer personal networks than non-commuters, since they can develop network links both in the locality where they live and in the locality where they work. In this paper, we test this hypothesis using micro-data for around three million individuals in Sweden. As far as we know, this is the first time this hypothesis is tested. In our empirical analysis, we make a distinction between three groups of individuals: non-com¬muters, intra-regions commuter and inter-region commuters. For each of this groups we test how the probability of becoming self-employed is influenced by a number of characteristics of individuals, characteristics of home and work localities and regions. Our results indicate a significant difference between non-commuters and commuters in terms of the role of networks for becoming self-employed. On the one hand, we find for non-commuters that living and working in a locality with rich business networks reduce the probability of becoming self-employed. For commuters, on the other hand we find that working in a locality with rich business networks increase the probability to become self-employed. In this latter case, living in a municipality with rich business networks has a non-significant effect on the probability of becoming self-employed. Our results indicate that it is the business networks where people work, rather than where they live that exerts a positive influence on the probability of becoming self-employed.

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Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 365.

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Length: 28 pages
Date of creation: 21 May 2014
Date of revision:
Handle: RePEc:hhs:cesisp:0365
Contact details of provider: Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/

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