IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp12189.html
   My bibliography  Save this paper

Transitioning from Solo Self-Employed to Microbusiness Employer: Local Economic Environment or Owner Characteristics?

Author

Listed:
  • Henley, Andrew

    (Cardiff University)

Abstract

Only a minority of micro-businesses create jobs for others. This paper addresses whether personal characteristics and resources of the microbusiness owner or the local external economic environment are drivers of job creation. In the UK context of significant growth in self-employment but a declining proportion who create jobs, an investigation using longitudinal data is provided. Individual demographic and resource characteristics are found to be more important, but place effects are relatively weak. Entrepreneurship policy needs to target particular groups, including women and less experienced business owners in their localities.

Suggested Citation

  • Henley, Andrew, 2019. "Transitioning from Solo Self-Employed to Microbusiness Employer: Local Economic Environment or Owner Characteristics?," IZA Discussion Papers 12189, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp12189
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp12189.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Fritsch & David J. Storey, 2014. "Entrepreneurship in a Regional Context: Historical Roots, Recent Developments and Future Challenges," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 939-954, June.
    2. Meyer, Bruce D, 1990. "Unemployment Insurance and Unemployment Spells," Econometrica, Econometric Society, vol. 58(4), pages 757-782, July.
    3. Westlund, Hans & Bolton, Roger, 2003. "Local Social Capital and Entrepreneurship," Small Business Economics, Springer, vol. 21(2), pages 77-113, September.
    4. Robert W. Fairlie & Alicia Robb, 2007. "Families, Human Capital, and Small Business: Evidence from the Characteristics of Business Owners Survey," ILR Review, Cornell University, ILR School, vol. 60(2), pages 225-245, January.
    5. Disney, Richard & Gathergood, John, 2009. "Housing wealth, liquidity constraints and self-employment," Labour Economics, Elsevier, vol. 16(1), pages 79-88, January.
    6. 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 129-138, February.
    7. 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.
    8. Nathalie Colombier & David Masclet, 2008. "Intergenerational correlation in self employment: some further evidence from French ECHP data," Small Business Economics, Springer, vol. 30(4), pages 423-437, April.
    9. Pontus Braunerhjelm & Ding Ding & Per Thulin, 2018. "The knowledge spillover theory of intrapreneurship," Small Business Economics, Springer, vol. 51(1), pages 1-30, June.
    10. Kuhn, Johan M. & Malchow-Møller, Nikolaj & Sørensen, Anders, 2016. "Job creation and job types – New evidence from Danish entrepreneurs," European Economic Review, Elsevier, vol. 86(C), pages 161-187.
    11. Erik Hurst & Annamaria Lusardi, 2004. "Liquidity Constraints, Household Wealth, and Entrepreneurship," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 319-347, April.
    12. Adriaan Van Stel & David Storey, 2004. "The Link between Firm Births and Job Creation: Is there a Upas Tree Effect?," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 893-909.
    13. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, March.
    14. 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.
    15. Hannu Niittykangas & Hannu Tervo, 2005. "Spatial variations in intergenerational transmission of self-employment," Regional Studies, Taylor & Francis Journals, vol. 39(3), pages 319-332.
    16. David B. Audretsch (ed.), 2006. "Entrepreneurship, Innovation and Economic Growth," Books, Edward Elgar Publishing, number 4130, November.
    17. Norin Arshed & Sara Carter & Colin Mason, 2014. "The ineffectiveness of entrepreneurship policy: is policy formulation to blame?," Small Business Economics, Springer, vol. 43(3), pages 639-659, October.
    18. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    19. David B. Audretsch & Martin Obschonka & Samuel D. Gosling & Jeff Potter, 2017. "A new perspective on entrepreneurial regions: linking cultural identity with latent and manifest entrepreneurship," Small Business Economics, Springer, vol. 48(3), pages 681-697, March.
    20. Marco Caliendo & Steffen K�nn, 2014. "Regional Effect Heterogeneity of Start-up Subsidies for the Unemployed," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 1108-1134, June.
    21. Burke, Andrew E & FitzRoy, Felix R & Nolan, Michael A, 2002. "Self-Employment Wealth and Job Creation: The Roles of Gender, Non-pecuniary Motivation and Entrepreneurial Ability," Small Business Economics, Springer, vol. 19(3), pages 255-270, November.
    22. Robert W. Fairlie, 2013. "Entrepreneurship, Economic Conditions, and the Great Recession," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 22(2), pages 207-231, June.
    23. Gerke J. Hoogstra & Jouke van Dijk, 2004. "Explaining Firm Employment Growth: Does Location Matter?," Small Business Economics, Springer, vol. 22(3_4), pages 179-192, April.
    24. Scott Shane, 2009. "Why encouraging more people to become entrepreneurs is bad public policy," Small Business Economics, Springer, vol. 33(2), pages 141-149, August.
    25. Audretsch, David B. & Keilbach, Max C. & Lehmann, Erik E., 2006. "Entrepreneurship and Economic Growth," OUP Catalogue, Oxford University Press, number 9780195183511.
    26. Aparna Mathur, 2010. "Health insurance and job creation by the self-employed," Small Business Economics, Springer, vol. 35(3), pages 299-317, October.
    27. Joris Knoben & Roderik Ponds & Frank van Oort, 2011. "Employment from new firm formation in the Netherlands: Agglomeration economies and the Knowledge Spillover Theory of Entrepreneurship," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 23(3-4), pages 135-157, April.
    28. Jose Maria Millan & Emilio Congregado & Concepcion Roman & Mirjam van Praag & Andre van Stel, 2011. "The Value of an Educated Population for an Individual's Entrepreneurship Success," Tinbergen Institute Discussion Papers 11-066/3, Tinbergen Institute, revised 06 May 2014.
    29. Andrew Burke & Felix FitzRoy & Michael Nolan, 2008. "What makes a die-hard entrepreneur? Beyond the ‘employee or entrepreneur’ dichotomy," Small Business Economics, Springer, vol. 31(2), pages 93-115, August.
    30. Ewald Kibler & Teemu Kautonen & Matthias Fink, 2014. "Regional Social Legitimacy of Entrepreneurship: Implications for Entrepreneurial Intention and Start-up Behaviour," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 995-1015, June.
    31. Audretsch, David B. & Lehmann, Erik E., 2005. "Does the Knowledge Spillover Theory of Entrepreneurship hold for regions?," Research Policy, Elsevier, vol. 34(8), pages 1191-1202, October.
    32. Millán, Ana & Millán, José María & Román, Concepción & van Stel, André, 2013. "How does employment protection legislation influence hiring and firing decisions by the smallest firms?," Economics Letters, Elsevier, vol. 121(3), pages 444-448.
    33. Andrew Henley, 2017. "The post-crisis growth in the self-employed: volunteers or reluctant recruits?," Regional Studies, Taylor & Francis Journals, vol. 51(9), pages 1312-1323, September.
    34. Michael Fritsch & Michael Wyrwich, 2014. "The Long Persistence of Regional Levels of Entrepreneurship: Germany, 1925-2005," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 955-973, June.
    35. Andrew Henley, 2005. "Job Creation by the Self-employed: The Roles of Entrepreneurial and Financial Capital," Small Business Economics, Springer, vol. 25(2), pages 175-196, September.
    36. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604, March.
    37. Johan Wiklund & Holger Patzelt & Dean Shepherd, 2009. "Building an integrative model of small business growth," Small Business Economics, Springer, vol. 32(4), pages 351-374, April.
    38. C. M. Van Praag & J. S. Cramer, 2001. "The Roots of Entrepreneurship and Labour Demand: Individual Ability and Low Risk Aversion," Economica, London School of Economics and Political Science, vol. 68(269), pages 45-62, February.
    Full references (including those not matched with items on IDEAS)

    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. Cowling, Michael Leith & Wooden, Mark, 2021. "Does solo self-employment serve as a ‘stepping stone’ to employership?," Labour Economics, Elsevier, vol. 68(C).
    2. Millán, Ana & Millán, José María & Román, Concepción & van Stel, André, 2013. "How does employment protection legislation influence hiring and firing decisions by the smallest firms?," Economics Letters, Elsevier, vol. 121(3), pages 444-448.
    3. Jose Maria Millan & Emilio Congregado & Concepcion Roman & Mirjam van Praag & Andre van Stel, 2011. "The Value of an Educated Population for an Individual's Entrepreneurship Success," Tinbergen Institute Discussion Papers 11-066/3, Tinbergen Institute, revised 06 May 2014.
    4. Lukas Matejovsky & Sandeep Mohapatra & Bodo Steiner, 2014. "The Dynamic Effects of Entrepreneurship on Regional Economic Growth: Evidence from Canada," Growth and Change, Wiley Blackwell, vol. 45(4), pages 611-639, December.
    5. 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.
    6. Paul A. Coomes & Jose Fernandez & Stephan F. Gohmann, 2013. "The Rate of Proprietorship Among Metropolitan Areas: The Impact of the Local Economic Environment and Capital Resources," Entrepreneurship Theory and Practice, , vol. 37(4), pages 745-770, July.
    7. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    8. Pontus Braunerhjelm & Ding Ding & Per Thulin, 2016. "Labour as a knowledge carrier: how increased mobility influences entrepreneurship," The Journal of Technology Transfer, Springer, vol. 41(6), pages 1308-1326, December.
    9. Román, Concepción & Congregado, Emilio & Millán, José María, 2013. "Start-up incentives: Entrepreneurship policy or active labour market programme?," Journal of Business Venturing, Elsevier, vol. 28(1), pages 151-175.
    10. Andrew Henley, 2017. "The post-crisis growth in the self-employed: volunteers or reluctant recruits?," Regional Studies, Taylor & Francis Journals, vol. 51(9), pages 1312-1323, September.
    11. Hien Thu Tran & Enrico Santarelli, 2017. "Spatial heterogeneity, industry heterogeneity, and entrepreneurship," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 59(1), pages 69-100, July.
    12. Konon, Alexander & Fritsch, Michael & Kritikos, Alexander S., 2018. "Business cycles and start-ups across industries: An empirical analysis of German regions," Journal of Business Venturing, Elsevier, vol. 33(6), pages 742-761.
    13. R. Sandra Schillo & Ajax Persaud & Meng Jin, 2016. "Entrepreneurial readiness in the context of national systems of entrepreneurship," Small Business Economics, Springer, vol. 46(4), pages 619-637, April.
    14. Ana Millán & José María Millán & Concepción Román, 2016. "The Role of Start-up Incentives on Entrepreneurship Dynamics in a Post-Crisis Era: Evidence from European Countries," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(03), pages 29-35, October.
    15. Robert W. Fairlie & Javier Miranda, 2017. "Taking the Leap: The Determinants of Entrepreneurs Hiring Their First Employee," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(1), pages 3-34, February.
    16. Matthew J. Lindquist & Joeri Sol & Mirjam Van Praag, 2015. "Why Do Entrepreneurial Parents Have Entrepreneurial Children?," Journal of Labor Economics, University of Chicago Press, vol. 33(2), pages 269-296.
    17. Joern Block & Roy Thurik & Haibo Zhou, 2013. "What turns knowledge into innovative products? The role of entrepreneurship and knowledge spillovers," Journal of Evolutionary Economics, Springer, vol. 23(4), pages 693-718, September.
    18. Colombelli, Alessandra & Krafft, Jackie & Vivarelli, Marco, 2016. "New Firms and Post-Entry Performance: The Role of Innovation," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201602, University of Turin.
    19. Farzana Chowdhury & David B. Audretsch, 2021. "A dynamic relationship between entrepreneurial orientation and entrepreneurial activity," Journal of International Entrepreneurship, Springer, vol. 19(3), pages 339-356, September.
    20. repec:cii:cepiei:2014-q2-138-2 is not listed on IDEAS
    21. André Stel & José Millán & Concepción Román, 2014. "Investigating the impact of the technological environment on survival chances of employer entrepreneurs," Small Business Economics, Springer, vol. 43(4), pages 839-855, December.

    More about this item

    Keywords

    self-employment; micro-business; job creation; local environment; longitudinal analysis;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:iza:izadps:dp12189. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    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: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.