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Measuring Entrepreneurship
Abstract
This volume provides a comprehensive review of the theoretical concepts and empirical models of entrepreneurship from a non-conventional perspective. Its main purpose is to contribute to the design of an efficient system of indicators of entrepreneurship and competitiveness. The existence of a gap between the theory of entrepreneurship and the methods and data available for testing its main propositions has been widely recognized. Hence, some of the most prestigious researchers have collaborated to review and develop the statistical sources, indicators and proxies currently available for empirical studies on the phenomena of entrepreneurship.
The book thereby makes recent advances in the theory and application of the economics of entrepreneurship accessible to a wider audience, including policy makers, emphasizing data requirements to advance the future research agenda and to allow for a better design and monitoring of entrepreneurial policy.
... Entrepreneurial human capital (EHC) constitutes specialized, high-level entrepreneurship-specific competence and knowledge, which is crucial, e.g., in selling, negotiating, product development, and risk judgment (Shane 2003). EHC theory reckons that people with a high level of educational attainment are more likely to become self-employed (i.e., entrepreneurs) (Congregado 2008). These potential entrepreneurs combine various types of knowledge and skills for developing a good product or service to meet unsatisfied market demand or bring in some changes for mobilizing resources better, and this series of specific knowledge and skills can be regarded as two kinds of entrepreneurial human capitals (Congregado 2008). ...
... EHC theory reckons that people with a high level of educational attainment are more likely to become self-employed (i.e., entrepreneurs) (Congregado 2008). These potential entrepreneurs combine various types of knowledge and skills for developing a good product or service to meet unsatisfied market demand or bring in some changes for mobilizing resources better, and this series of specific knowledge and skills can be regarded as two kinds of entrepreneurial human capitals (Congregado 2008). As for the influencing mechanism, EHC affects entrepreneurial business performance by empowering entrepreneur's competence in which it plays the mediational role (Wang et al. 2012). ...
Based on the theory of entrepreneurial human capital, this study employs questionnaires from 730 secondary vocational school students to explore the status quo of entrepreneurship education and the influence of entrepreneurship education, entrepreneurial knowledge, and entrepreneurial competence on entrepreneurial intention. The study results prove the following. First, the participation rate of entrepreneurship education in secondary vocational schools is much higher than in their counterpart (academic schools), with more than half of secondary vocational students reporting having received entrepreneurship education of diverse types. Second, students evaluated themselves with relatively high entrepreneurial competence and intention, although they answered “unclear” to entrepreneurial knowledge and entrepreneurship education. Third, motivation and leadership, as well as enterprise knowledge, play mediating roles through which entrepreneurship education affects entrepreneurial intention, and represent two types of entrepreneurial human capital-entrepreneurial knowledge and entrepreneurial competence. The implications of effective educational implementation are discussed.
... The most commonly used indicators of entrepreneurship are divided into three categories: (1) stock measures (self-employment or firm data), (2) flow measures (firm or self-employment entry/exit rates) and (3) indirect indicators of entrepreneurship such as competitiveness, patents, etc. In a strict sense, self-employment data are related to the Knightian entrepreneur who assumes all the uncertainty connected with the firm (see Congregado [38] for a detailed discussion). ...
A growing body of empirical literature—both on the micro and macro scale—is devoted to exploring the existence of hysteresis—or at least persistence—in self-employment, i.e., whether policy, economic or external shocks have transitory or persistent effects on the probability of survival, and in turn, on the natural rate of self-employment. In aggregate time series studies, the usual method to address this issue has been to look for unit roots by using alternative tests or by using unobservable components models. In this research, we performed a battery of tests and competing approaches to check the robustness of our results with UK self-employment time series. The UK is a suitable case for study because the recent evolution of the UK self-employment rate figures shows a steady growth since the beginning of the millennium. This long-term rise in UK self-employment has attracted the attention of scholars, at least, before the Great Lockdown. We find evidence of hysteresis, while business cycle output variations significantly affect self-employment rates. The article discusses the implications of the findings.
... Iskanje sistematičnega nabora kazalnikov za merjenje ključnih dimenzij podjetništva je postalo ena izmed poglavitnih potreb za zagotovitev napredka ekonomske analize ter za oblikovanje, spremljanje in vrednotenje javnih politik (Congregado 2008 ). Na podlagi predstavljenih mer podjetniške aktivnosti na nacionalni ravni ocenjujemo, da so med njimi velike in pomembne metodološke razlike. ...
... Over the last few decades we have witnessed a rise in the rate of self-employment in many European Union Member States (Luber and Leicht, 2000;Arum and Müller, 2004;Van Stel 2005). Most of the existing research treats the self-employed as a more or less homogeneous group of entrepreneurs (Congregado, 2008;Verheul and Van Stel, 2010). However, we also know that there is great diversity within this labour force category (OECD, 1992;Bosch and Van Vuuren, 2010;Bögenhold and Fachinger, 2012). ...
This paper investigates the relationship between
start-up motivation (opportunity versus necessity) and entrepreneurial
performance of an important subset of entrepreneurs,
viz., the solo self-employed. We use a unique
individual-level panel data set of solo self-employed in the
Netherlands (2010–2011) and construct three separate
measures derived from the literature to identify necessitydriven
solo self-employment. Using annual turnover as
measure of entrepreneurial performance, we consistently
find that necessity-driven solo self-employed perform
worse than opportunity-driven solo self-employed. Still,
only a low proportion of necessity solo self-employment
may be considered precarious employment, suggesting
necessity entrepreneurship is not so worrisome as sometimes
assumed. In general, our findings suggest that the
borderline between necessity and opportunity entrepreneurship
in developed economies may be less clear-cut
than previously assumed.
One of the most important transitions of China from a centrally planned economy to a market-based economy was the emergence of entrepreneurship in two different forms of private enterprise, viz., getihu and siyingqiye. Getihu firms are legally restricted to a household ownership structure and a firm size upper limit. Siyingqiye firms do not face these restrictions but are more costly to set up. Using a unique database for 31 Chinese regions over the period 1997–2009, we investigate the economic antecedents of regional rates of getihu and siyingqiye, and to what extent these antecedents are in line with the “entrepreneurial” or the “managed” economy as per Audretsch and Thurik (Audretsch and Thurik, Journal of Evolutionary Economics 10:17–34, 2000, Audretsch and Thurik, Industrial and Corporate Change 10:267–315, 2001). We find that particularly the antecedents of regional siyingqiye rates are in line with the “entrepreneurial” economy in the sense that regional economies that are more conducive to knowledge production and knowledge spillovers have higher rates of siyingqiye firms. Overall, our analysis suggests that both types of entrepreneurship play important but distinct roles in stimulating China’s economic development.
The purpose of this study was to develop an instrument for assessing psychological readiness for entrepreneurship. A well-designed measurement of entrepreneurship psychological readiness can provide early warning to policymakers, in this case the government, and provide education and funding to prospective entrepreneurs who must not only be examined physically, but also psychologically. Using Exploratory Factor Analysis (EFA) and reliability analysis, the validity and reliability of the Entrepreneurship Psychological Readiness (EPR) instrument were examined. An Exploratory Factor Analysis (EFA) found that the Entrepreneurship Psychological Readiness (EPR) instrument’s eight-factor model explained 57.44% of the variance among the items. To develop a fit model, it was necessary to exclude 26 items from the questionnaire, leaving 59 items left. The factors name identified by Personal Knowledge, Personal Adversity, Committed Certain Action, Willingness to Learn, Personal Relationship to Others, Personal Growth, Passion Achieved, and Related Person Support. All of the eight-factor models have excellent reliability of 0.96.
The present paper aims to assess the existing shortfalls in the model used for the computation of the Global Entrepreneurship Index (GEI) especially for economies that have not participated in the Global Entrepreneurship Monitor (GEM) annual surveys. Due to the lack of participation of some countries in these annual surveys, the authors of the GEI try to estimate the individual factors of the GEM non-members by employing data from member countries called “nearby and similar countries.” Using some examples and several statistical robust methods, this paper demonstrated that the estimated individual factors of non-member countries, especially in underdeveloped countries, will lead to an unavoidable error. Likewise, it was showed that, due to the unpredictable nature of individual factors, the use of the previous data is not justifiable. Additionally, this study showed that the use of the arithmetic mean (AM) will overestimate the individual factors for non-member countries, while the geometric mean (GM) has the capability of accurate estimation. Finally, using statistical procedures such as cluster analysis, non-parametric methods, and model selection methods, it was shown that the GEI values are divided into two different clusters. It seems that the main reason for this distinction was a dissimilarity between the GEI amount in the GEM members and non-members, which may be due to employing incorrect estimators and the underlying methods of the GEI.
This paper provides estimates of the elasticity of substitution between operational and managerial jobs in the US economy during the years 1969–2014, derived from an aggregate CES production function. Estimating the long-term relationship between (the log of) the aggregate employment/self-employment ratio and (the log of) the returns from paid-employment relative to self-employment and testing for structural breaks, we report different estimates of the elasticity of substitution in each of the two regimes identified. To this end we apply the methodology on instability tests proposed in Kejriwal and Perron (2008, 2010) as well as the cointegration tests developed in Arai and Kurozumi (2007) and Kejriwal (2008). Our results help to understand and interpret one of the most intriguing aspects in the evolution of self-employment rates in developed countries: the reversal of the trend in self-employment rates. Our estimates show that a higher level of development is associated with a greater number of entrepreneurs and smaller firms. Some rationales for understanding the growth of the elasticity between paid-employment and self-employment, including the recent trends in the digital economy, are also suggested.
Este trabajo trata de contrastar la hipótesis de convergencia estocástica para el gasto
total en I+D+i de las comunidades autónomas españolas así como el peso relativo de sus componentes
público y privado durante el período 1987-2013, haciendo uso del test de estacionariedad
con cambio estructural para datos de panel propuesto por Carrión, del Barrio y López-Bazo
(2005). En el período analizado la hipótesis de convergencia es aceptada tanto al considerar
el esfuerzo inversor en I+D+i total como cuando examinamos este esfuerzo en función de su
naturaleza pública o privada. Por tanto, ya sea como consecuencia de la adecuación de las
políticas o de las fuerzas que operan en los mercados y que determinan la configuración de
los tejidos empresariales regionales, los resultados parecen apuntar hacia una mayor cohesión,
en términos de esfuerzo innovador de los diferentes territorios, lo que debería traducirse en
unos efectos favorables sobre la reducción de los desequilibrios, reforzandose así la cohesión
territorial.
Palabras clave: innovación, cambio estructural (múltiple), tests de raíces unitarias para
datos de panel, convergencia.
Clasificación JEL: C22, C23, O31, O32.
This article aims to examine whether any causal relationships exist among different types of entrepreneurial activity and economic growth. The theory and some empirical evidence proved positive outcomes of entrepreneurial activity, but mixed evidence on the role of entrepreneurship in economic growth. For the purposes of empirical testing, a longitudinal analysis was employed for 24 differently developed countries to estimate the relationship between different types of entrepreneurial activity and GDP growth rate, controlling for the impact of countries' developmental stage and time. The data were obtained from the Global Entrepreneurship Monitor database and complemented with data from other international sources. The results confirmed that entrepreneurship activity, especially innovation-oriented one, is correlated with economic growth, but this relationship is influenced by the economy's developmental stage as well as by specific characteristics of certain years included in the analysis. Our results indicate that governmental interventions cannot be the same for all countries; rather, they have to be adjusted to the specific developmental stage of the national economy and type of entrepreneurship.
Entrepreneurship development is increasingly seen as a promising alternative to traditional economic development, as it unlocks the potential of local citizens to create jobs and serve local tastes and markets. However, while much of the literature in entrepreneurship is dedicated to high-growth, high-tech development and its job-generating qualities, is this necessarily a good route for rural areas seeking to create jobs? Or, is rural entrepreneurship distinct from entrepreneurship as a discipline, presenting its own opportunities and challenges? This article presents a review of the literature on rural entrepreneurship, and argues that rural entrepreneurship is a distinct area of entrepreneurship research and practice, with alternative opportunities for local development that do not necessarily follow the mainstream literature.
The relationship between unemployment and self-employment has been studied extensively. Due to its complex, multifaceted nature,
various scholars have found a large array of different results, so that the exact nature of the relation is still not clear.
An important element of the relation is captured by the recession-push hypothesis which states that in times of high unemployment
individuals are pushed into self-employment for lack of alternative sources of income such as paid employment. We make two
contributions to this literature. First, we argue that official unemployment rates may not capture the ‘true’ rate of unemployment
as it does not include ‘hidden’ unemployed who are out of the labour force. Therefore, we propose a new method where the ‘recession-push’
effect relates not only to the (official) unemployed but also to the inactive population. Second, we argue that the magnitude
of the recession-push effect is non-linear in the business cycle, i.e. the effect is disproportionally stronger when economic
circumstances are worse. We provide empirical support for our hypotheses by estimating an econometric model on Spanish data.
KeywordsCointegration–Non-linear–Entrepreneurship–Self-employment–Unemployment
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