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The resource-based view, signaling, and behavioral perspectives focus on different theoretical mechanisms through which human capital and the behavioral characteristics of nascent entrepreneurs, in combination with insider and outsider financing, may influence the emergence of new ventures. This work tests the relative explanatory power of these different theoretical perspectives. We estimate a mediation model to disentangle the direct effect of nascent entrepreneur personal characteristics on new firm creation from their indirect effects, mediated by the amount of insider financing committed to new ventures and access to greater outsider financing. Our empirical results are based on data from the Panel Study of Entrepreneurial Dynamics (PSED II) and improve our understanding of the drivers of new firm creation and their underlying mechanisms. Our findings support the resource-based view and the behavioral perspective in our sample of nascent entrepreneurs, but do not provide evidence of the signaling perspective. [ABSTRACT FROM AUTHOR]

This paper distinguishes between formal and informal entrepreneurship. It theorises that each are influenced by very different combinations of macro-economic factors and strongly moderated by country income levels. Empirically, we show the ease of starting a business and high-quality governance, exert a powerful influence on formal, but not informal entrepreneurship. The latter is influenced by self-employment rates in low-income countries and by female labour force participation in high-income countries. Policy-makers seeking to improve economic welfare through enhancing entrepreneurship therefore have to choose the 'type' of entrepreneurship on which to focus and then select appropriate policies. By providing a novel grouping of these policies, we are able to assist them in making these choices. Plain English Summary: Policy-makers: Decide what type of entrepreneurship you want for your country and, only then, choose your policies, because 'one size doesn't fit all.' Entrepreneurs come in all shapes and sizes, ranging from informal street market traders on the one hand to formal tech giants in majestic offices on the other. The view of most governments is that entrepreneurship is 'good' because it not only provides employment for the market trader and for the tech giant, but also for many others in the economy. Governments therefore spend taxpayers' money funding entrepreneurs to start and grow their businesses, but this raises two key questions: first, should it be the formal tech giant, or the informal street trader, that receives public funds and second, how should these be provided? Our conclusion, based on evidence from more than 80 high- and low-income countries, is that effective policy not only has to take account of the formal/informal distinction and the income level of the country, but also how that policy is delivered. We show that, in low-income countries, formal entrepreneurship is more likely to be enhanced by state policies to promote education and female activity rates; it is less likely to be stimulated by the creation of more enterprises. This is because relatively few informal enterprises subsequently make the transition to formality and to significant job creation. [ABSTRACT FROM AUTHOR]

Women are consistently underrepresented among graduate entrepreneurs. This is especially true among the entrepreneurs who graduate in STEM fields. Here, we aim at identifying factors that reduce/enlarge the gender imbalance in entrepreneurship among STEM graduates. In particular, we explore the underinvestigated association between university education in STEM fields and entrepreneurial entry of recent female and male graduates considering graduates' whole university curriculum. Our analyses on the graduates who obtained a Master of Science degree in the 2005–2009 period from Politecnico di Milano reveal that training in economics and management reduces the gender imbalance in entrepreneurial entry among STEM recent graduates. The gap is instead larger among the graduates who attended courses that aggregate students from different STEM fields or did an internship. Plain English Summary: University education affects the gender gap in entrepreneurship among STEM graduates! Attending courses aggregating students from multiple STEM programs and doing internships enhance this gap, while training in economics and management reduces it. Women are severely underrepresented among STEM graduate entrepreneurs. Our study investigates the relationship between university education in STEM fields and entrepreneurial entry of recent female and male graduates. Using data on 13,840 graduates who obtained a Master of Science degree in the 2005–2009 period from Politecnico di Milano, we find that attending courses in economics and management reduces the gender imbalance in entrepreneurial entry among STEM recent graduates. The gap is instead larger among the graduates who attended courses aggregating students from different STEM fields or did an internship. Our study offers important implications for university managers, as it helps them design university curricula in STEM fields that may be more conducive to female entrepreneurial entry. [ABSTRACT FROM AUTHOR]

A modified version of Lazear's model (in American Economic Review, 94, 208-211, 2004, Journal of Labor Economics, 23, 649–680, 2005) for occupational choice is formulated. It includes a utility adjustment factor that captures the combined effect of nonpecuniary benefits and uncertainty associated with entrepreneurship. We show that the counterfactual income returns to entrepreneurship are lower than the market value of entrepreneurial talent and higher than the inverse of the utility adjustment factor. Moreover, if the skill profiles in the population are Fréchet-distributed, the ratio between the expected incomes of entrepreneurs and observationally similar wage employees is lower than the inverse of the utility adjustment factor. Thus, entrepreneurs will on average earn less than wage employees if the utility adjustment factor is greater than or equal to one. It is also shown that the self-selection bias related to this income ratio or returns measure increases with the observed percentage of entrepreneurs. Swedish employment data are used to calibrate the modified Lazear model. The empirical results indicate that uncertainty considerations might be more important for the occupational choices than nonpecuniary benefits. [ABSTRACT FROM AUTHOR]

This paper investigated the association between life-cycle factors and entrepreneurship. We provided a comprehensive investigation into life-cycle factors, such as marriage, health, education, age, previous labor market experience, and gender of children. Moreover, we focused on rural persons, who are confronted with a disadvantageous entrepreneurial environment. We found that marriage was positively associated with the likelihood of entrepreneurship, and the association existed only among rural men. Educated persons and healthy persons were more likely to engage in entrepreneurial activities. In particular, previous hospitalization experience and high medical expenses were negatively associated with entrepreneurship, while minor health problems were not correlated with entrepreneurship. Concerning the gender of children, daughters instead of sons were positively correlated with entrepreneurial probability, and the correlation was stronger and more significant among rural men. Our results could be useful for policymakers seeking to incentivize entrepreneurship among rural residents in developing countries. [ABSTRACT FROM AUTHOR]

This study examines the impacts of national institutions and human capital on entrepreneurship density in a global sample of 67 economies over the period 2006–2016. Furthermore, the associations between human capital and institutions on entrepreneurial activities are investigated while controlling for financial development, economic growth, trade openness, FDI inflows and total natural rents. Employing the panel corrected standard error estimator to deal with cross-sectional dependence, we find that formal institutions represented by entrepreneurship procedures and the general institutional quality are positively associated with entrepreneurship density. Also, informal institutions represented by socialist history, common law system and colonial history are positively associated with entrepreneurship density. Notably, human capital has a moderating effect in reducing the negative impacts of weak institutions. [ABSTRACT FROM AUTHOR]

Using macro-level data for 32 European countries, the present paper explores developments in the education distributions among solo self-employed workers and employer entrepreneurs in the non-agricultural economy over the period 1997–2014. Our dynamic analysis reveals that over this period, the number of solo self-employed workers, but particularly the high-educated solo self-employed, has increased considerably in Europe. This trend is even more pronounced for female solo self-employment. The education distribution of the solo self-employed is thus shifting quickly towards higher levels of education. Moreover, our static analysis based on 2014 reveals that, for the higher-developed countries within Europe (Western Europe including Scandinavia), solo self-employed and employer entrepreneurs are on average equally highly educated. We also find that the solo self-employed in Western Europe are considerably higher educated than their counterparts in the rest of Europe. In general, our results underline the rapidly increasing importance of, particularly high-educated, solo self-employed workers in modern, highly developed economies. [ABSTRACT FROM AUTHOR]

We investigate the roles of inward FDI and education in explaining country levels of entrepreneurship. It is widely recognised that inward FDI may have positive but also negative spillover effects on entrepreneurial activity. We argue that both types of spillovers (positive and negative) may be reinforced by high education levels of the labour force. Using a database across 75 countries between 2001 and 2015, we estimate a 2SLS model that tests for this moderating role of education. We find support for a negative interaction effect of FDI and macro-level education on the rate of entrepreneurial activity, suggesting that in countries with highly educated labour forces, inward FDI leads to more jobs in the wage sector rather than a higher number of entrepreneurs. Policy implications are discussed. [ABSTRACT FROM AUTHOR]

There is no consensus on the impact of education on entrepreneurial choice in both theory and empirics. China's Higher Education Expansion (HEE) policy initiated in 1999 provides us a unique opportunity to identity the causal relationship between college education and entrepreneurship by exploiting the Fuzzy Regression Discontinuity Design (FRDD) approach. In this paper, we use the China Household Income Project (CHIP) 2013 database, finding that China's HEE policy significantly increases the probability of obtaining college education by 12%. There is suggestive evidence that college education decreases overall and self-employed-type of entrepreneurial choices, but increases boss-type activities; none of the coefficients are precisely estimated, though. Our results are robust to different inference approaches. [ABSTRACT FROM AUTHOR]

We examine how economic institutions, measured by the Economic Freedom of the World (EFW) index, affect the relationship between capital—human, social, and financial—and opportunity-motivated entrepreneurship (OME). To do this, we develop a multi-level model that connects theories of human and social capital at the micro-level to institutional theories at the macro-level. Using data from the Global Entrepreneurship Monitor (GEM), we then test the predictions of our model and find evidence that economic institutions play a crucial role in the relationship between these three distinct types of capital and OME. Our results are somewhat counter-intuitive—as the quality of the institutional environment improves, human and financial capitals become less important determinants of entrepreneurship while the relationship between social capital and entrepreneurship substantially strengthens. [ABSTRACT FROM AUTHOR]

Is there a positive contemporaneous association between balance in cognitive skills and self-employment earnings? In this paper, we extend past studies that draw on balance in cognitive skills tests administered at an early age and use the balance in scores on cognitive skills tests administered during 2011-2012 in the Programme for the International Assessment of Adult Competencies (PIAAC), a cross-sectional sample of 47,768 adult participants from 18 countries. Lowering concerns for cognitive skills measured at an early age, PIAAC's measure of cognitive skills provides a contemporaneous measure of cognitive skills also accumulated through past experiences. Using a standardized measure of cognitive skills across participating countries, PIACC also lowers concerns for measurement error resulting from cultural bias in country-specific cognitive skills tests. Extending the entrepreneurship earnings puzzle—lower average income for the self-employed relative to wage earners—a greater balance in cognitive skills among the self-employed helps close earnings gaps with wage earners. However, balance in cognitive skills is not associated with self-employment. The implications of the findings are discussed. [ABSTRACT FROM AUTHOR]

This paper investigates the income return to entrepreneurship and wage employment by means of Lazear's model of occupational choice. The paper has two major aims. The first is to develop a new theoretical framework for analyzing the income return to entrepreneurship by combining the Lazear model with the assumption that the skill profiles in a population are Fréchet-distributed. The second is to demonstrate that the resulting theoretical derivations can be used for a new type of regional analysis of the income return to entrepreneurship and wage employment. The empirical analysis is based on data for individuals with a Master of Science degree in Electrical Engineering. We compute their income return to self-employment and wage employment in three parts of Sweden: the Stockholm region, the combined Gothenburg and Malmö region, and the Rest of Sweden. The results show that the average return to self-employment is less than 5% in all regions and smaller in the Gothenburg and Malmö region than in the other two regions. The regional differences are explained by the differential supply curves and market values of entrepreneurial talent. The theoretical derivation of the income return to entrepreneurship is the main contribution of the paper. Another contribution is the derivation of regional supply curves for entrepreneurs. [ABSTRACT FROM AUTHOR]

We investigate whether the start-up motive is related to the entrepreneur's earnings, and whether the relationship between the entrepreneur's business tenure (i.e., the time the entrepreneur is running the business) and his earnings depends on the start-up motive. We employ a unique longitudinal data base providing information on start-up motive and earnings for 7902 entrepreneurs in the EU-15 countries, where 12 different start-up motives are distinguished. We classify these 12 motives in three broad categories of opportunity, necessity and other start-up motives. Our analysis shows that, first, earnings of necessity entrepreneurs are significantly lower than those of opportunity entrepreneurs, irrespective of the type of necessity motive. Second, these differences remain rather stable over the course of the entrepreneur's business tenure, i.e., these differences are of a permanent nature. Third, we do not find evidence for earnings differences within the broad category of necessity entrepreneurs (i.e., between the different types of necessity motives). [ABSTRACT FROM AUTHOR]

Based on large representative German household survey data, we compare incomes of the self-employed with those of paid employees. We find that the entrepreneurial income gap is largest for those holding a tertiary degree, but in two directions: positive for employers (self-employed with further employees) and negative for solo entrepreneurs. Entrepreneurs holding a tertiary degree also face the greatest income variation. However, some solo self-employed earn more than their employed counterparts, in particular those with a university entrance degree as the highest level of education. [ABSTRACT FROM AUTHOR]

A review of literature in entrepreneurship and public policy suggests that the level of political freedom, corruption, and education are important antecedents to the rate of entrepreneurial activity in nations. However, empirical analysis of the effect these factors have on entrepreneurial activity across nations remains ambiguous. This study proposes that the cultural context of nations moderates the effect of these factors. Consistent with this argument, it investigates the role of individualism-collectivism in moderating the effect of political freedom, corruption, and education on entrepreneurial activity across nations. Macro-level data on 84 nations is obtained from multiple reliable sources and used to test the hypotheses. Results support the theorized arguments and suggest that individualism positively moderates the effect of political freedom, negatively moderates the effect of corruption, and positively moderates the effect of education, on the rate of entrepreneurial activity across nations. [ABSTRACT FROM AUTHOR]

Given the importance of entrepreneurial thinking and acting as a meta-skill in the future world of work, we focus on the emerging entrepreneurial mind-set in the transition to adulthood. We study the role of personality characteristics and age-appropriate entrepreneurial competencies (leadership, self-esteem, creativity, and proactivity motivation) in the prediction of entrepreneurial alertness and career intention. Using two-wave longitudinal data from high schools in Helsinki, Finland ( N = 523), we tested a mediation model with competencies as mediators between personality and entrepreneurial alertness and intention. The findings suggest that entrepreneurial alertness and career intention (a) are rather independent career development constructs of the emerging entrepreneurial mind-set, (b) are both an expression of an entrepreneurial personality structure, and (c) are predicted by different underlying competencies: leadership and self-esteem mediated the personality-entrepreneurial intention link, and leadership, creativity, and proactivity motivation the personality-entrepreneurial alertness link. Consistent with the balanced skill approach to entrepreneurship, the intraindividual variety of these competencies was also a valid mediator; it did not show incremental predictive power though. Implications for research and practice are discussed. [ABSTRACT FROM AUTHOR]

This paper proposes that risk aversion encourages individuals to invest in balanced skill profiles, making them more likely to become entrepreneurs. By not taking this possible linkage into account, previous research has underestimated the impacts of both risk aversion and balanced skills on the likelihood individuals choose entrepreneurship. Data on Dutch university graduates provide an illustration supporting our contention. We raise the possibility that even risk-averse people might be suited to entrepreneurship; and it may also help explain why prior research has generated somewhat mixed evidence about the effects of risk aversion on selection into entrepreneurship. [ABSTRACT FROM AUTHOR]

Are college dropouts successful entrepreneurs? Other than anecdotal evidence on illustrious college dropouts who managed to become self-made billionaires, there is only limited empirical evidence to answer this question. This paper addresses this issue by investigating the relationship between college dropout or graduation and entrepreneurship activity as well as performance. Using information from the Danish labor market register, we identify college students, whether these students graduate, and if they registered a new venture. We find that a larger share of dropouts starts a business, but this reflects the endogeneity of the decision to exit from college. On average, becoming an entrepreneur does not allow dropouts to escape from their punishment in the labor market. [ABSTRACT FROM AUTHOR]

What makes a successful entrepreneur? Using Danish register data, we find strong support for the hypothesis that theoretical skills from schooling and practical skills acquired through wage-work are complementary inputs in the human capital earnings function of entrepreneurs. In fact, we find that schooling only pays off in combination with wage-work experience, as the returns to schooling are insignificant when the entrepreneur has no wage-work experience. The results are extremely robust toward more flexible specifications, including fixed-effect estimations dealing with unobserved heterogeneity. Furthermore, the interaction term is negligible for non-entrepreneurs, suggesting that the complementarity between wage-work experience and schooling is a distinctive characteristic of entrepreneurs. [ABSTRACT FROM AUTHOR]

This study challenges the basic reasoning behind Lazear's theory on entrepreneurship (). Based on the key motive of maximizing one's lifetime income, Lazear posits that individuals with a balanced set of skills should have a higher probability of being self-employed. His 'Jack-of-all-trades' hypothesis presumes that entrepreneurs need sufficient knowledge in a variety of areas to succeed, while paid employees benefit from being specialists in a certain area demanded by the labor market. Because most women-led businesses are neither based on the motive of making money nor are they growth oriented, we argue that maximizing their lifetime income is not the main motivation of many women to start a business. However, we argue that Lazear's theory can be extended to motivations that are mostly stated for women entrepreneurs as well. We apply it to a specific representative sample of 1384 women graduates in Germany and test our hypothesis with logit regression. A dichotomized measure indicating whether a women graduate was self-employed ( n = 706) or not ( n = 678) served as the dependent variable. Our results widely confirm Lazear's assumption for women graduates who run relatively small businesses in terms of sales and employment: professional training, balanced industry experience, and balanced entrepreneurship-based self-efficacy increase the probability of being self-employed. Solo self-employed tend to have balanced industry experience more often than those being in a team or having employees. Lazear's theory has male as the norm, and as such, does not readily apply to the case of women-but could and should be extended to women's specifics. [ABSTRACT FROM AUTHOR]

We use a multipronged identification strategy to estimate the effect of college education on business and employment survival. We account for the endogeneity of both education and business ownership with a competing risks duration model augmented with a college selection equation. We estimate the model jointly on the self-employed and salaried employees in the National Longitudinal Survey of Youth 1979. Unlike most previous studies, we find that college does not increase business survival. By contrast, a college degree significantly increases employment survival. Cognitive skills have a positive impact on survival for both the self-employed and employees. These findings suggest that college benefits the self-employed less than salaried, perhaps by generating skills more useful in employment than self-employment, or because of differences in the value of signaling. [ABSTRACT FROM AUTHOR]

We study how startup teams are assembled in terms of team member human capital characteristics. To this end, we derive a statistically motivated benchmark for new venture team heterogeneity in terms of observed team member characteristics to generate stylized facts about team member diversity at startup and how it evolves as the new venture matures. We use the population of Danish startups that were established in 1998 and track them until 2001. Main findings are that teams are relatively more homogeneous at startup compared to our benchmark, indicating that difficulties associated with workforce heterogeneity (like affective conflict or coordination cost) as well as 'homophily' (people's inclination to bound with others with similar characteristics) may overweigh the benefits of heterogeneity. While workforce heterogeneity does increase over time, the increase is smaller compared to our benchmark but substantially larger than if team additions and replacements had the same characteristics as the initial team members. [ABSTRACT FROM AUTHOR]

The entrepreneurship literature has identified several entrepreneurial traits as being important to become a successful entrepreneur. Using the Five Factor personality model we analyze differences between two types of entrepreneurs: Individuals founding an enterprise out of university employment and graduates who are not employed at the university before starting a company. To analyze potential differences in personality between these two groups we use a unique data set of former students from a large German university. We show that entrepreneurs out of the university context possess lower levels of openness to experience as well as higher levels of agreeableness. Also, we provide evidence for the importance of the predominant type of knowledge upon which academic ventures are built. The findings confirm that entrepreneurs out of the university context overly focus on the scientific aspects of their start-up idea and thus may pursue it in a potentially suboptimal manner, but that this can be mitigated by dedicated support measures and structures within the university, for which we also provide specific examples. [ABSTRACT FROM AUTHOR]

Do national differences in cognitive skills (CS) predict a nation's likelihood of generating high-quality entrepreneurs who create and expand high-value businesses? We answer this question by estimating cross-country regressions that use the Acs and Szerb Global Entrepreneurship Development Index (GEDI) and a measure of national CS. After including conventional controls we find for a sample of 60 countries that our measure of CS robustly predicts the GEDI (unconditional correlation = 0.65, standardized beta = 0.42), an index that gives weight to both entrepreneurial attitudes within a nation and the institutional and economic prerequisites for creating high-value, high-growth firms. We find that this result also holds for an alternative measure of entrepreneurship. [ABSTRACT FROM AUTHOR]

Despite the short-run elements in his work, Schumpeter succeeded in drawing economists back in the other direction. This paper examines Schumpeter's formal, analytical micro-model of entrepreneurship and innovation, which laid the groundwork for a workable micro-model of the long-run growth process. Schumpeter's enduring work continues to guide effective policy, though concern for the general welfare permits neither the long run nor the short run to be ignored. [ABSTRACT FROM AUTHOR]

Given the big employment losses in the current economic and financial crisis, not only the creation of new jobs is important for economic and social welfare, but also the conservation of existing jobs. In this respect, it is crucial that firms that employ personnel survive. In this article, we investigate the role of the technological environment in determining the survival chances of employer entrepreneurs, defined as owner-managers of firms that employ personnel. We estimate survival models to analyze durations as an employer entrepreneur, using micro-panel data from EU-15 countries drawn from the European Community Household Panel. As indicators for the technological environment, we use a country's R&D expenditures, a country's employment share of high-tech and knowledge-intensive sectors, and a country's number of patent applications to the European Patent Office. We find strong support for a positive relationship between these indicators of the technological environment in country j and year t and survival chances of employer entrepreneurs in that same country and year. Our analysis also suggests that a selection effect may be part of the explanation in the sense that in a more advanced technological environment, relatively more 'high-quality' individuals select into entrepreneurship. [ABSTRACT FROM AUTHOR]

This paper aims at shedding light upon the impact of universities on graduates' entrepreneurial choice. Previous studies analyze the relationship between the choice of university and labor market success of graduates in terms of their subsequent wages, employability or over-education, whereas the possible link between the choice of university and entrepreneurial choice is neglected. Using 1998-2008 data on graduates from Swedish higher education institutions, the paper finds significant variation in the impact of universities on the career choice of graduates. The results suggest that graduates with degrees in the social sciences, natural sciences, medicine and teacher education from more prestigious universities systematically differ from others in their entrepreneurial choice. At the same time, no statistically significant difference is found for technical science graduates. [ABSTRACT FROM AUTHOR]

Based on a large, representative German household panel, we investigate to what extent the personality of individuals influences the entry decision into and the exit decision from self-employment. We reveal that some traits, such as openness to experience, extraversion, and risk tolerance affect entry, but different ones, such as agreeableness or different parameter values of risk tolerance, affect exit from self-employment. Only locus of control has a similar influence on the entry and exit decisions. The explanatory power of all observed traits among all observable variables amounts to 30 %, with risk tolerance, locus of control, and openness having the highest explanatory power. [ABSTRACT FROM AUTHOR]

This article examines whether founders' human capital affects not only actual investment but also required investment in research and development (R&D), using the original data of Japanese start-up firms. The estimation results indicate that higher levels of founders' human capital, especially their education levels, increase both actual and required investment in R&D and thus do not necessarily contribute to reducing the funding gap for R&D. [ABSTRACT FROM AUTHOR]

Policy in developed countries is often based on the assumption that higher business ownership rates induce economic value. Recent microeconomic empirical evidence may lead to a more nuanced view: Especially the top-performing business owners are responsible for the value creation of business owners. Other labor market participants would contribute more to economic value creation as an employee than as a business owner. The implied existence of an 'optimal' business ownership rate would thus replace the dictum of 'the more business owners, the merrier.' We attempt to establish whether there is such an optimal level, i.e., a quadratic relation between the business ownership rate and economic output rather than a linear or higher-order relationship, while investigating the role of tertiary education. Two findings stand out. First, by estimating extended versions of traditional Cobb-Douglas production functions on a sample of 19 OECD countries over the period 1981-2006, we indeed find robust evidence of an optimal business ownership rate. Second, the relation between business ownership and macroeconomic productivity is steeper for countries with higher participation rates in tertiary education. Thus, the optimal business ownership rate tends to decrease with tertiary education levels. This is consistent with microeconomic theory and evidence showing that business owners with higher levels of human capital run larger firms. [ABSTRACT FROM AUTHOR]

This paper examines the effects and origins of balanced skills among nascent entrepreneurs. In a first step we apply Lazear's jack-of-all-trades theory to investigate performance effects of a balanced skill set. Second, we investigate potential sources of balanced skills, thereby testing the investment hypothesis against the endowment hypothesis. Analyzing data on high-potential nascent projects, we find support for the notion that balanced skills are important for making progress in the venture creation process. Regarding the origins of balanced skills, the data support both hypotheses. In line with the investment hypothesis, an early interest in an entrepreneurial career, prior managerial and entrepreneurial experience are significantly related with a more balanced skill set. Supporting the endowment hypothesis, an entrepreneurial personality profile indicating entrepreneurial talent is correlated with a balanced skill set. Our results thus hint at the need for theories on the origins of a balanced skill set that integrate both views. [ABSTRACT FROM AUTHOR]

Low-skilled workers do not fare well in today's skill intensive economy and their opportunities continue to diminish. Utilizing data from the survey of income and program participation, this paper provides an analysis of the economic returns to business ownership among low-skilled workers and addresses the essential question of whether self-employment is a good option for low-skilled individuals that policymakers might consider encouraging. The analysis reveals substantial differences in the role of self-employment among low-skilled workers across gender and nativity-women and immigrants are shown to be of particular importance from both the perspectives of trends and policy relevance. We find that, although the returns to low-skilled self-employment among men is higher than among women, the analysis shows that wage/salary employment is a more financially rewarding option for most low-skilled workers. [ABSTRACT FROM AUTHOR]

How valuable is formal education for entrepreneurs' income relative to employees'? And if the income returns to formal education are different for entrepreneurs vis-à-vis employees, what might be a plausible explanation? To explore these questions, we analyze a large representative US panel. We show that entrepreneurs have higher returns to formal education than employees. We refer to this as the entrepreneurship returns puzzle. We run post hoc analyses to explore a number of potential explanations of this puzzle. Indirectly, our analysis indicates that the higher returns to formal education for entrepreneurs might be due to the fewer organizational constraints they face, leading to more personal control over how to use their human capital, compared to employees. [ABSTRACT FROM AUTHOR]

This paper discusses the determinants of becoming an intrapreneur. Individuals maximise their utility while deciding among three occupations: independent entrepreneurship, paid employment and intrapreneurship. I show that intrapreneurs resemble employees rather than entrepreneurs. Specifically, comparing the decision-making of intrapreneurs to that of entrepreneurs, the former are significantly more risk averse, expect lower but less uncertain reward and are broadly endowed with a poorer set of entrepreneurial abilities; despite having higher levels of human capital they fail to recognise business opportunities and have lower confidence in their entrepreneurial skills. A distinction within the category of intrapreneurship, based on the level of engagement and therefore the level of personal risks they bear, adds to our understanding of intrapreneurship. Engaged intrapreneurs, i.e., intrapreneurs that expect to acquire an ownership stake in the business, unlike the rest of intrapreneurs, share the attributes usually assumed to characterise entrepreneurs. [ABSTRACT FROM AUTHOR]

The current paper analyzes the role of the individual and regional knowledge context in forming university students' entrepreneurial intentions. As access to knowledge resources is crucial for the growth and survival of knowledge-based start-ups, we argue that an individual's decision in favor or against becoming an entrepreneur should critically depend on the multilevel context providing her with access to strategically relevant knowledge. A unique dataset for German students and regions allows us to analyze a variety of personal and regional determinants of entrepreneurial intentions among students. At the individual level we find that role models facilitating the transfer of tacit knowledge and the expectation that strong ties will provide know-how and know-who positively impact entrepreneurial intentions. At the regional level we find that a high regional start-up rate in knowledge-based industries and a high growth rate of regional knowledge production positively influence entrepreneurial intentions. [ABSTRACT FROM AUTHOR]

This study explores whether an entrepreneur's ability to assemble and leverage human capital, particularly specific human capital relating to prior business ownership experience, is associated with seven types of product and work practices innovation in an emerging region, namely, Ghana. Logistic regression estimation revealed that portfolio entrepreneurs were more likely than novice entrepreneurs to report ' innovation tried'. Multinomial logistic regression analysis revealed that portfolio entrepreneurs were more likely than other entrepreneurs to report ' innovation tried and introduced'. If the goals of policy are to increase the 'quality' of new business start-ups and maximize investment returns, there is a case to target assistance to portfolio entrepreneurs. [ABSTRACT FROM AUTHOR]

Many studies suggest that rates of return to schooling are lower for entrepreneurs than for employees, although the opposite has also been reported. This paper analyses the returns to education for entrepreneurs in urban and rural regions in Finland and compares these to the returns for wage earners. These areas show different rates of self-employment, higher rates being found in rural areas and lower rates in urban areas. The analysis is based on a rich, register-based dataset that includes a 7% random sample of all Finns. To avoid potential sources of bias, Mincer-type income equations are estimated using different estimation procedures. The results show regional variation in returns to education. In rural areas, returns to education are somewhat higher for entrepreneurs than for wage earners. Highly educated entrepreneurs especially gain advantage from their education. In urban areas as well as in the entire country, the returns for the two occupation groups are rather similar. [ABSTRACT FROM AUTHOR]

This paper tests whether academic achievement is a significant determinant of employment status in the Italian labor market: are new entrepreneurs selected from the top or bottom end of the graduate ability distribution? Is the cream of the graduate crop pulled into self-employment by the higher expected earnings or are individuals with lower degree score pushed into entrepreneurship by poor alternatives? Our data show a strong negative relation between academic achievement and self-employment status, i.e., we find skimming of the best graduates into wage and salary work. [ABSTRACT FROM AUTHOR]

This article uses inequality decomposition techniques in order to analyze the consequences of entrepreneurial activities to household income inequality in southern Ethiopia. A uniform increase in entrepreneurial income reduces per capita household income inequality. This implies that encouraging rural entrepreneurship may be favorable for both income growth and income distribution. Such policies could be particularly successful if directed at the low-income, low-wealth, and relatively uneducated segments of the society. [ABSTRACT FROM AUTHOR]

Although it is well documented that minorities are underrepresented among the self-employed, no study to date has examined how limited educational opportunity might be responsible. Using data from the High School and Beyond Fourth Follow-Up survey and controlling for detailed educational histories, this study finds that most variables associated with academic success actually reduce the likelihood one will aspire to own their own business at an early age. Positive developers of self-employment aspirations include financial resources and having a parent who is already self-employed. Asians and males are also more likely to anticipate owning their own business. [ABSTRACT FROM AUTHOR]

Extending human capital approaches to entrepreneurship, an entrepreneur’s “inputs” relating to their general (i.e. education and work experience) and entrepreneurship-specific human capital profile (i.e. business ownership experience, managerial capabilities, entrepreneurial capabilities and technical capabilities) are presumed to be related to entrepreneurial “outputs” in the form of business opportunity identification and pursuit. Valid and reliable independent variables were gathered from a stratified random sample of 588 owners of private firms. Ordered logit analysis was used to test several theoretically derived hypotheses. With regard to the number of business opportunities identified and pursued, entrepreneurship-specific rather than general human capital variables “explained” more of the variance. Entrepreneurs reporting higher information search intensity identified significantly more business opportunities, but they did not pursue markedly more or less opportunities. The use of publications as a source of information was positively associated with the probability of identifying more opportunities, while information emanating from personal, professional and business networks was not. Implications for practitioners and researchers are discussed. [ABSTRACT FROM AUTHOR]

This article examines to what extent recent empirical evidence can collectively and systematically substantiate the claim that entrepreneurship has important economic value. Hence, a systematic review is provided that answers the question: What is the contribution of entrepreneurs to the economy in comparison to non-entrepreneurs? We study the relative contribution of entrepreneurs to the economy based on four measures that have most widely been studied empirically. Hence, we answer the question: What is the contribution of entrepreneurs to (i) employment generation and dynamics, (ii) innovation, and (iii) productivity and growth, relative to the contributions of the entrepreneurs’ counterparts, i.e., the ‘control group’? A fourth type of contribution studied is the role of entrepreneurship in increasing individuals’ utility levels. Based on 57 recent studies of high quality that contain 87 relevant separate analyses, we conclude that entrepreneurs have a very important—but specific—function in the economy. They engender relatively much employment creation, productivity growth and produce and commercialize high-quality innovations. They are more satisfied than employees. More importantly, recent studies show that entrepreneurial firms produce important spillovers that affect regional employment growth rates of all companies in the region in the long run. However, the counterparts cannot be missed either as they account for a relatively high value of GDP, a less volatile and more secure labor market, higher paid jobs and a greater number of innovations and they have a more active role in the adoption of innovations. [ABSTRACT FROM AUTHOR]