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Entrepreneurs and output: theory and empirical evidence with Spanish data

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posted on 2023-06-08, 17:50 authored by Vicente Salas-Fumas, J.Javier Sanchez-Asin, David Storey
This paper extends the Lucas (1978)model of occupational choices by individuals with different skills, beyond the simple options of self-employment or wage-employment, by including a second choice for the self-employed. That is, an option to hire employees and so become self-employed with employees (SEWEs), or to be self-employed without employees (SEWNEs). We solve for the market equilibrium and examine the sensitivity of relative sizes of occupational groups, and of the level of productivity, to changes in the exogenous parameters. The results show that the positive (negative) association between number of SEWEs (SEWNEs) and productivity, observed in the Spanish data, can be explained, under certain conditions, as the result of cross-region and time differences in average skills. These findings point to the importance of distinguishing between SEWEs and SEWNEs in drawing valid conclusions concerning any link between entrepreneurship and economic development.

History

Publication status

  • Published

File Version

  • Published version

Publisher

University of Sussex

Place of publication

Brighton, Sussex

Department affiliated with

  • SPRU - Science Policy Research Unit Publications

Notes

SWPS 2013-13

Institution

University of Sussex

Full text available

  • Yes

Legacy Posted Date

2014-07-14

First Open Access (FOA) Date

2016-03-22

First Compliant Deposit (FCD) Date

2016-03-22

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