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Habitual Entrepreneurs in the Making: How Labour Market Rigidity and Employment Affects Entrepreneurial Re-entry

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Abstract

We investigate the impact of country-level labour market regulations on the re-entry decision of experienced entrepreneurs, whereby they become habitual entrepreneurs. Multilevel logit models on entry decisions among 15,709 individuals in 29 European countries show that labour market regulations have a positive influence on the decision to re-enter into entrepreneurship. This positive impact is stronger among individuals holding wage jobs at the time of re-entry compared to those that do not. Our results indicate that novice and habitual entrepreneurs may respond very differently to labour market rigidity. We discuss and provide tentative explanations for these differences, and outline potential policy implications.

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  • Fu, Kun & Larsson, Anne-Sophie & Wennberg, Karl, 2017. "Habitual Entrepreneurs in the Making: How Labour Market Rigidity and Employment Affects Entrepreneurial Re-entry," Ratio Working Papers 297, The Ratio Institute.
    • Handle: RePEc:hhs:ratioi:0297
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    References listed on IDEAS

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    1. André Stel & David Storey & A. Thurik, 2007. "The Effect of Business Regulations on Nascent and Young Business Entrepreneurship," Small Business Economics, Springer, vol. 28(2), pages 171-186, March.
    2. Toft-Kehler, Rasmus & Wennberg, Karl & Kim, Phillip H., 2014. "Practice makes perfect: Entrepreneurial-experience curves and venture performance," Journal of Business Venturing, Elsevier, vol. 29(4), pages 453-470.
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    More about this item

    Keywords

    Habitual entrepreneurship; employment; labour market rigidity; institutional context; multilevel modelling;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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