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Solo self-employed versus employer entrepreneurs: determinants and macro-economic effects in OECD countries

Author

Listed:
  • André Stel

    (Panteia/EIM)

  • Sander Wennekers

    (Panteia/EIM
    Erasmus University Rotterdam)

  • Gerard Scholman

    (Panteia/EIM)

Abstract

We estimate an extended version of the three-equation model of Carree et al. (Small Bus Econ 19(3):271–290, 2002) where deviations from the ‘equilibrium’ rate of self-employment play a central role determining both the growth of self-employment and the rate of economic growth. In particular, we distinguish between solo self-employed and employer entrepreneurs, and allow for different ‘equilibrium’ relationships of these two types of independent entrepreneurship with the level of economic development. In addition, we also allow for different economic growth penalties of deviating from the ‘equilibrium’ rate for these two types. Using data for 26 OECD countries over the period 1992–2008, we find that the ‘equilibrium’ rate of solo self-employment seems to be independent of the level of economic development, whereas the ‘equilibrium’ rate of employer entrepreneurship is negatively related to economic development. Regarding the impact of deviating from the ‘equilibrium’ solo self-employment rate, we find that both positive and negative deviations diminish economic growth. For employer entrepreneurship we do not find such a growth penalty.

Suggested Citation

  • André Stel & Sander Wennekers & Gerard Scholman, 2014. "Solo self-employed versus employer entrepreneurs: determinants and macro-economic effects in OECD countries," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 4(1), pages 107-136, June.
    • Handle: RePEc:spr:eurasi:v:4:y:2014:i:1:d:10.1007_s40821-014-0003-z
    DOI: 10.1007/s40821-014-0003-z
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    References listed on IDEAS

    as
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    Cited by:

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    3. Stefan Schneck, 2020. "Self-employment as a source of income inequality," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(1), pages 45-64, March.
    4. Tina Haussen & Marcus Schlegel, 2020. "Unemployment reduction through solo self-employment: A gender question?," Empirical Economics, Springer, vol. 59(6), pages 3085-3105, December.
    5. Urbano, David & Aparicio, Sebastian & Guerrero, Maribel & Noguera, Maria & Torrent-Sellens, Joan, 2017. "Institutional determinants of student employer entrepreneurs at Catalan universities," Technological Forecasting and Social Change, Elsevier, vol. 123(C), pages 271-282.
    6. Prieger, James E. & Bampoky, Catherine & Blanco, Luisa R. & Liu, Aolong, 2016. "Economic Growth and the Optimal Level of Entrepreneurship," World Development, Elsevier, vol. 82(C), pages 95-109.
    7. Steffen E. Schummer & Kathleen Otto & Lena Hünefeld & Maria U. Kottwitz, 2019. "The role of need satisfaction for solo self-employed individuals’ vs. employer entrepreneurs’ affective commitment towards their own businesses," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-18, December.
    8. Cheng, Zhiming & Smyth, Russell, 2021. "Education and migrant entrepreneurship in urban China," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 506-529.
    9. Xiaoyan Huang & Yuli Chen, 2021. "The Impact of Entrepreneurship on Economic Growth within a City," Businesses, MDPI, vol. 1(3), pages 1-9, October.
    10. Alexander Chepurenko, 2019. "‘Non-Routine Entrepreneurs’: Another Path of Realizing Entrepreneurial Intentions," Administrative Sciences, MDPI, vol. 9(2), pages 1-15, May.

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