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Entrepreneurship in a Unionised Economy

Author

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  • Kanniainen, V.
  • Leppamaki, M.

Abstract

The paper shows that labor market institutions are important for the formation of new enterprises. The effects of labor market institutions on entrepreneurship, wage determination, and firm size are analysed analytically and illustrated numerically. The main result is that an increase in union power reduces the equilibrium rate of entrepreneurship and reduces the average size of enterprises.

Suggested Citation

  • Kanniainen, V. & Leppamaki, M., 2000. "Entrepreneurship in a Unionised Economy," University of Helsinki, Department of Economics 484, Department of Economics.
    • Handle: RePEc:fth:helsec:484
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    References listed on IDEAS

    as
    1. Ilmakunnas Pekka & Kanniainen Vesa, 2001. "Entrepreneurship, Economic Risks, and Risk Insurance in the Welfare State: Results with OECD Data 1978±93," German Economic Review, De Gruyter, vol. 2(3), pages 195-218, August.
    2. de Wit, Gerrit, 1993. "Models of Self-Employment in a Competitive Market," Journal of Economic Surveys, Wiley Blackwell, vol. 7(4), pages 367-397, December.
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    4. Holtz-Eakin, Douglas & Joulfaian, David & Rosen, Harvey S, 1994. "Sticking It Out: Entrepreneurial Survival and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 53-75, February.
    5. 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.
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    7. Pekka Ilmakunnas & Jukka Topi, 1999. "Microeconomic and Macroeconomic Influences on Entry and Exit of Firms," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(3), pages 283-301, November.
    8. Pekka Ilmakunnas & Vesa Kanniainen & Uki Lammi, "undated". "Entrepreneurship, Economic Risks, and Risk-Insurance in the Welfare State," EPRU Working Paper Series 99-03, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    9. Booth,Alison L., 1994. "The Economics of the Trade Union," Cambridge Books, Cambridge University Press, number 9780521468398, September.
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    12. Agell, J., 2000. "On the Determinants of Labour Market Institutions: Rent-sharing vs. Social Insurance," Papers 2000:16, Uppsala - Working Paper Series.
    13. Holtz-Eakin, Douglas & Rosen, Harvey S & Weathers, Robert, 2000. "Horatio Alger Meets the Mobility Tables," Small Business Economics, Springer, vol. 14(4), pages 243-274, June.
    14. Holmstrom, Bengt R. & Tirole, Jean, 1989. "The theory of the firm," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 2, pages 61-133, Elsevier.
    15. Robin Boadway & Nicolas Marceau & Maurice Marchand & Marianne Vigneault, 1998. "Entrepreneurship, Asymmetric Information, and Unemployment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(3), pages 307-327, July.
    16. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
    17. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
    18. R. Glenn Hubbard & William M. Gentry, 2000. "Tax Policy and Entrepreneurial Entry," American Economic Review, American Economic Association, vol. 90(2), pages 283-287, May.
    19. Oswald, Andrew J, 1982. "The Microeconomic Theory of the Trade Union," Economic Journal, Royal Economic Society, vol. 92(367), pages 576-595, September.
    20. Lindh, Thomas & Ohlsson, Henry, 1996. "Self-Employment and Windfall Gains: Evidence from the Swedish Lottery," Economic Journal, Royal Economic Society, vol. 106(439), pages 1515-1526, November.
    21. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
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    Cited by:

    1. Kanniainen, V. & Vesala, T., 2000. "Enterprise Formation and Labor Market Institutions," University of Helsinki, Department of Economics 483, Department of Economics.
    2. Kanniainen, Vesa & Vesala, Timo, 2005. "Entrepreneurship and labor market institutions," Economic Modelling, Elsevier, vol. 22(5), pages 828-847, September.

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    More about this item

    Keywords

    LABOUR MARKET ; ENTREPRENEURS ; OCCUPATIONAL CHOICE;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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