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What makes a Die-Hard Entrepreneur? Trying, or Persisting in, Self-Employment

Author

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  • Andrew E. Burke
  • Michael A. Nolan
  • Felix R. FitzRoy

Abstract

The paper makes three contributions to the economics literature on entrepreneurship. We offer a new measure of entrepreneurship which accounts for variations in persistence in self-employment. We outline an econometric methodology to account for this approach and find that it is superior to probit/logit models which have dominated the literature. While our results indicate that this existing literature is good at explaining an individual's propensity to try self-employment, we find that entrepreneurial persistence is determined by a different model and unearth some new insights into the roles of early career experience, finance, role models, gender and the unemployment push effect.

Suggested Citation

  • Andrew E. Burke & Michael A. Nolan & Felix R. FitzRoy, "undated". "What makes a Die-Hard Entrepreneur? Trying, or Persisting in, Self-Employment," Papers on Entrepreneurship, Growth and Public Policy 2005-23, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  • Handle: RePEc:esi:egpdis:2005-23
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    File URL: ftp://papers.econ.mpg.de/egp/discussionpapers/2005-23.pdf
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    References listed on IDEAS

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    1. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    2. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    3. Maitreesh Ghatak & Massimo Morelli & Tomas Sjöström, 2001. "Occupational Choice and Dynamic Incentives," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(4), pages 781-810.
    4. repec:bla:econom:v:68:y:2001:i:272:p:539-65 is not listed on IDEAS
    5. C. Mirjam van Praag, 2003. "Business Survival and Success of Young Small Business Owners," Small Business Economics, Springer, vol. 21(1), pages 1-17, August.
    6. Taylor, Mark P, 1999. "Self-Employment and Windfall Gains in Britain: Evidence From Panel Data," CEPR Discussion Papers 2084, C.E.P.R. Discussion Papers.
    7. Mark P. Taylor, 2001. "Self–Employment and Windfall Gains in Britain: Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 68(272), pages 539-565, November.
    8. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    9. C. Mirjam van Praag, 2003. "Business Survival and Success of Young Small Business Owners," Tinbergen Institute Discussion Papers 03-050/3, Tinbergen Institute.
    10. Jones, Andrew M, 1989. "A Double-Hurdle Model of Cigarette Consumption," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(1), pages 23-39, Jan.-Mar..
    11. James S. Foreman-Peck, 1985. "Seedcorn or Chaff? New Firm Formation and the Performance of the Interwar Economy," Economic History Review, Economic History Society, vol. 38(3), pages 402-422, August.
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    Cited by:

    1. Dieter Bögenhold & Andrea Klinglmair, 2017. "One-person enterprises and the phenomenon of hybrid self-employment: evidence from an empirical study," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(2), pages 383-404, May.
    2. Dieter Bogenhold & Andrea Klinglmair, 2015. "Micro-Entrepreneurship: Tendency towards Precarious Work? Empirical Findings for Austria," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 1(2), pages 107-122, April.
    3. Bögenhold, Dieter & Klinglmair, Robert & Kandutsch, Florian, 2018. "Self-employment on the way in a digital economy: A variety of shades of grey," MPRA Paper 85321, University Library of Munich, Germany.

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    More about this item

    Keywords

    Self-employment; entrepreneurial persistence; count data;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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