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Does self-employment measure entrepreneurship? evidence from Great Britain

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  • Faggio, Giulia
  • Silva, Olmo

Abstract

Research on entrepreneurship often uses information on self-employment to proxy for business creation and innovative behaviour. However, little evidence has been collected on the link between these measures. In this paper, we use data from the UK Labour Force Survey (LFS) combined with data from the Business Structure Database (BSD), and the Community Innovation Survey (CIS) to study the relation between self-employment, business creation and innovation. In order to do so, we aggregate individual and firm-level data at the Travel-to-Work Area (TTWA) and investigate how the incidence of self-employment correlates with the density of business start-ups and innovative firms. Our results show that in urban areas a higher incidence of self-employment positively and strongly correlates with more business creation and innovation, but this is not true for rural areas. Further analysis suggests that this urban/rural divide is related to lack of employment opportunities in rural areas, which might push some workers into self-employment as a last resort option.

Suggested Citation

  • Faggio, Giulia & Silva, Olmo, 2012. "Does self-employment measure entrepreneurship? evidence from Great Britain," LSE Research Online Documents on Economics 57919, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:57919
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    Cited by:

    1. Albert Sumell, 2020. "Overdose Deaths and Entrepreneurial Activity," Economies, MDPI, vol. 8(1), pages 1-10, March.
    2. Víctor M. González Sánchez, 2018. "Self-employment, Knowledge and Economic Growth: An empirical study for Latin American countries," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 12(4), December.
    3. Faggio, Giulia & Silva, Olmo, 2014. "Self-employment and entrepreneurship in urban and rural labour markets," Journal of Urban Economics, Elsevier, vol. 84(C), pages 67-85.
    4. Philippe Bracke & Christian Hilber & Olmo Silva, 2012. "Homeownerhip and Entrepreneurship," SERC Discussion Papers 0103, Centre for Economic Performance, LSE.
    5. Skrzek-Lubasińska, Małgorzata & Szaban, Jolanta M., 2019. "Nomenclature and harmonised criteria for the self-employment categorisation. An approach pursuant to a systematic review of the literature," European Management Journal, Elsevier, vol. 37(3), pages 376-386.
    6. Rafik Abdesselam & Jean Bonnet & Patricia Renou-Maissant & Mathilde Aubry, 2018. "Entrepreneurship, economic development, and institutional environment: evidence from OECD countries," Journal of International Entrepreneurship, Springer, vol. 16(4), pages 504-546, December.
    7. Małgorzata Bartosik-Purgat & Barbara Jankowska, 2017. "The Use of Social Networking Sites in Job Related Activities: A Cross-cultural Comparison," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 5(2), pages 177-193.
    8. Philippe Bracke & Christian Hilber & Olmo Silva, 2012. "Homeownerhip and Entrepreneurship," SERC Discussion Papers 0103, Centre for Economic Performance, LSE.
    9. Víctor M. González-Sánchez & Antonio Martínez Raya & Susana de los Ríos-Sastre, 2020. "An Empirical Study for European Countries: Factors Affecting Economic Growth and Self-Employment by Gender," Sustainability, MDPI, vol. 12(22), pages 1-15, November.
    10. Jan Brzozowski, 2017. "Immigrant Entrepreneurship and Economic Adaptation: A Critical Analysis," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 5(2), pages 159-176.
    11. Malgorzata Skrzek-Lubasinska & Zofia Grodek-Szostak, 2020. "The Self-Employment Rate Index as a Measure of Economic Trends: Impact of Heterogeneity of the Self-Employed on the Quality of Indicators," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 2), pages 483-501.
    12. Luisa Gagliardi, 2015. "Does skilled migration foster innovative performance? Evidence from British local areas," Papers in Regional Science, Wiley Blackwell, vol. 94(4), pages 773-794, November.
    13. Katharina Pijnenburg, 2013. "Self-Employment and Economic Performance: A Geographically Weighted Regression Approach for European Regions," Discussion Papers of DIW Berlin 1272, DIW Berlin, German Institute for Economic Research.
    14. Daly, Moira, 2015. "The long term returns of attempting self-employment with regular employment as a fall back option," Labour Economics, Elsevier, vol. 35(C), pages 26-52.
    15. Rafik Abdesselam & Jean Bonnet & Patricia Renou-Maissant, 2017. "The Demography of Enterprises and Employment in the European Union Countries," Economics Working Paper Archive (University of Rennes & University of Caen) 2017-10, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.

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    More about this item

    Keywords

    entrepreneurship; self-employment; spatial distribution;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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