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2008 | Book

Measuring Entrepreneurship

Building a Statistical System

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About this book

Entrepreneurship is playing an increasingly important role in the political agenda. Thisphenomenonis dueto theincreasingin?uenceofpolitics ontheentrepreneurial promotion of growth and employment objectives. This results in the need to satisfy the new demand for statistical information in two ways. On the one hand, quanti- tive information -stock and ?ow analysis, on the other hand, qualitative information –which tries to assess the ability to create wealth and employment and to innovate and export, among others. Consequently, searching a systematic set of indicators that allows us to understand the basic entrepreneurshipdimensions in order to di- nose, forecast,andmonitorentrepreneurialnetworks,is crucial forboththe research agenda and the political action agenda. However, the lack of this kind of statistical information is clear if we review some statistical subsystems on entrepreneurship on a comparison basis. The few essays on the subject are still in an initial stage. The reference theoretical framework to set the key dimensions to be analysed is to be established yet. The search for indicators and even the articulation of speci?c statistics have become crucial in order to make progressin the applied research, and to design, implement, and assess the different measurements of public intervention on this subject. Thus, the developmentof a set of indicatorsthat allow us to satisf- torily capture the different dimensions of the entrepreneurial network for a speci?c sector or territory becomes a basic element to assist progress in entrepreneurship knowledge.

Table of Contents

Frontmatter

Introduction and Outline

Frontmatter
Chapter 1. Introduction and Outline
Emilio Congregado

The Current State: Entrepreneurship in Theory and Practice

Frontmatter
Chapter 2. Statistical Issues in Applied Entrepreneurship Research: Data, Methods and Challenges
Simon C Parker
Chapter 3. Entrepreneurial Tools
Abstract
The required tools for the analysis of the entrepreneur and their economic actions are absence and some confusion does exist which impedes theoretical development and empirical testing. The aim of this article is to set out a collection of analytical tools which in turn makes it difficult to draw-up economic policy used to foster entrepreneurship. For this purpose, the present paper given attention to the identification of the nature of the entrepreneur and his economic function; to study the composition and quality of the entrepreneurial network and the factors which affect the appearance of said economic agents.
José María O’kean, José Manuel Menudo

Measurement: Dimensions, Indicators and Statistical Sources

Frontmatter
Chapter 4. Understanding Entrepreneurship: Developing Indicators for International Comparisons and Assessments
Abstract
Everyone thinks entrepreneurship is important, including the OECD. There is a fairly extensive body of theoretical literature on entrepreneurship, its determinants and impacts but relatively little empirical work has been done by government policy analysts to analyse and compare entrepreneurship measures. In part this is due to the fact that limited data is available, especially international data.
Researchers argue about the link between entrepreneurship and growth, but everyone wants entrepreneurship even if the link to growth is not clear. There are myriad definitions that describe the notion of entrepreneurship in terms of high-level principles, but those definitions are not easily reflected through statistical measures. Some relatively straight-forward measures exist, but they do not necessarily reflect the entrepreneurship objectives that policy-makers want to pursue.
While virtually all countries are interested in entrepreneurship, the policy objectives that different countries pursue through entrepreneurship differ considerably. Some promote entrepreneurship for employment creation; others see it as a tool for improving productivity and international competitiveness. Nevertheless, most countries have shown a strong desire to understand entrepreneurship and to compare themselves to others so they can determine where it makes sense to copy successful policies, and where it does not.
The OECD has identified numerous government policy interests related to entrepreneurship and is proceeding to produce a periodic “Scoreboard” of internationally-comparable entrepreneurship indicators to assist evidence-based policy making. Data for the OECD Entrepreneurship Scoreboard will be drawn from both existing and new sources. A Manual for Measurement will be produced, to include definitions, methodologies and a framework of indicators.
Tim Davis
Chapter 5. The COMPENDIA Data Base: COMParative ENtrepreneurship Data for International Analysis
Abstract
This chapter presents a harmonized data set over the period 1972-2004, containing two-yearly data on the number of non-agricultural business owners and the size of the labour force for 23 OECD countries, as well as the quotient of these two variables which is called the business ownership rate of a country. The data set is called COMPENDIA and has been constructed by EIM Business and Policy Research, using OECD statistics as well as other relevant sources. We make an attempt to make business ownership rates comparable across countries and over time.
André van Stel
Chapter 6. Entrepreneurship Analysis from a Human Population Surveys’ Perspective
Abstract
This paper tries to collect, describe and evaluate all the potential statistical sources—each pursuing different goals—in order to study self-employment in Spain. The improvement of traditional databases together with the recent incorporation of new statistical sources is bolstering the knowledge of today’s labour market, self-employment included. Although the available information might be considered accurate for reaching the goals of each source, the information becomes incomplete and even erratic if we intend to analyse entrepreneurial activity by it.
José María Millán, Concepción Román, Emilio Congregado
Chapter 7. A Proposed Framework for Business Demography Statistics
Abstract
This chapter provides a step in that direction by proposing a framework of business demography indicators that can be applied across all OECD and large non OECD economies. The framework tries to provide a mechanism by which more comparable indicators of business demography can be produced across countries by considering both what is practically achievable and desirable. The framework deliberately sets out to measure business demographics. It does not therefore make proposals concerning other important indicators of entrepreneurship such as the characteristics of entrepreneurs (age, sex, education, previous entrepreneurial experience etc), entrepreneurial and related policies (government policy, bankruptcy regulations, access to finance, fiscal policy—personal and business taxes—business administrative burdens, employment laws, social security safety nets etc) or the characteristics of businesses that may predetermine success, such as research and development expenditure; although this work is being pursued as part of the OECD’s Entrepreneurship Indicators Project (see Davis, 2006). That said, the framework is able to provide information on types of businesses, successful, young, old, sector specific, etc, that can be used to provide the frame for dedicated surveys that attempt to determine what makes businesses succeed or fail.
Nadim Ahmad
Chapter 8. Entrepreneurship Performance and Framework Conditions: A General Framework
Abstract
This chapter presents a benchmark methodology developed by FORA, the Research and Analysis Division of the Ministry of Economic and Business Affairs, the National Agency for Enterprise and Construction in Denmark and the OECD. First the general methodology is presented. Next the methodology is exemplified by illustrating how the method can be used to provide policy makers with an overview of the policy areas which areas are key in a country’s overall strategy to promote entrepreneurship.
Morten Larsen

The Current Applied Research on Entrepreneurship

Frontmatter
Chapter 9. Self-Employment and Unemployment in Spanish Regions in the Period 1979–2001
Abstract
This chapter investigates the relation between changes in self-employment and changes in unemployment at the regional level in Spain in the period 1979-2001. We estimate a vector autoregression model as proposed by Audretsch, Carree, van Stel and Thurik (2005) using a data base for Spanish regions. By estimating the model we are able to empirically distinguish between two directions of causality. On the one hand increases in self-employment may contribute to lower unemployment rates (the ‘entrepreneurial’ effect). On the other hand, higher unemployment rates may push individuals into self-employment, thereby contributing to higher self-employment rates (the ‘refugee’ effect). In our analysis of these two effects we distinguish between higher and lower income regions within Spain. We find empirical support for the ‘entrepreneurial’ effect to exist, both in higher income and in lower income regions. As regards the ‘refugee’ effect, the evidence is mixed. We find empirical support for this effect for higher income regions. Remarkably, we do not find evidence for a ‘refugee’ effect in lower income regions of Spain, even though unemployment rates are on average higher in these regions. We argue that this may be partly related to a lack of incentives for unemployed individuals in these regions to find paid employment.
JEL-code: E24, L11, M13, O10, O52
Antonio Aníbal Golpe, André van Stel
Chapter 10. Tax Incentives and Entrepreneurship: Measurement and Data Considerations
Abstract
Governments and economic actors around the world have instituted a vast array of programs to help foster entrepreneurship. Perhaps the most commonly utilized and complex policy tool available is the income-tax system. The interplay between tax policy and entrepreneurial activity has received a great deal of attention in the economics literature. While this literature has provided a great deal of knowledge regarding the effects of tax policy on entrepreneurship the work is far from complete. A number of the shortcomings in the literature result because of a lack of quality data focused on self-employment outcomes. The purpose of this chapter is to illustrate the current state of knowledge regarding the impacts of taxation on entrepreneurship, to identify areas in which additional research is particularly warranted and the data requirements necessary to fill in these gaps in the literature.
JEL classification: H24, H25, J23, H26
Herbert J Schuetze
Chapter 11. Using Survival Models with Individual Data
Abstract
Since there exists in this literature a common interest to unravel the sources of both permanence in the self-employment status and firm survival, the present chapter is devoted to provide guidelines to applied researchers about which methods are suitable for any particular application related to self-employment and firm survival. Further, it should be noted that the econometric analysis of survival (duration) is a very wide field, and that the modest aim of the following sections in this chapter is to introduce the reader to such kind of econometric analysis.
Juan Antonio Máñez, María Engracia Rochina, Juan Antonio Sanchis
Chapter 12. Entrepreneurial Human Capital: Essays of Measurement and Empirical Evidence
Abstract
The aim of this paper is to survey the evidence on the relationship between self-employment and human capital from two fields in particular, economics of self-employment and empirical research on growth, emphasising in the sensibility of results to proxies used to capture education. Although, the emphasis is very much on education, rather than on any broader concept of human capital -due to the difficulties to capture other mechanisms of human capital accumulation- other concepts are also considered.
Emilio Congregado, Mónica Carmona, Concepción Román
Chapter 13. Global Entrepreneurship Monitor and Entrepreneurs’ Export Orientation
Abstract
The Global Entrepreneurship Monitor (GEM) presents an annual assessment of the national level of ‘early-stage’ entrepreneurial activity and the institutional conditions to which it is subject in a large number of countries. Within the framework of GEM a TEA (Total early-stage Entrepreneurial Activity) index has been developed to measure (early-stage) entrepreneurial activity. Next to this TEA index, the GEM also provides an indicator for the prevalence of export-oriented entrepreneurs within countries. This chapter presents an example of an empirical analysis using macro-level GEM data for 36 countries. More specifically, this chapter investigates whether the presence of export-oriented entrepreneurs is a more important determinant of economic growth than entrepreneurial activity in general. Our results suggest that export-oriented entrepreneurship is indeed more important for achieving high economic growth rates than entrepreneurial activity in general.
JEL-classification: F23, L25, L26, O47, O57
Jolanda Hessels, André van Stel
Chapter 14. Labour Market Institutions and Entrepreneurship
Abstract
The impact of labour market institutions on both labour supply and job search rates has been exhaustively analysed in Labour Economics from theoretical as well as empirical approaches. However, research on the impact of this regulation on self-employment and its composition is limited, that is, the impact of labour market institutions on occupational choice and labour demand. In this context, the aim of this study is to revise the effects of certain labour market institutions on self-employment rates, defining the key dimensions and revising those indicators that could be used for capturing these effects, making an abstraction of the tax system effects.
Antonio Aníbal Golpe, José María Millán, Concepción Román
Chapter 15. Financial System and Entrepreneurship: Institutions and Agents
Abstract
The availability or ability to access the capital necessary to start an entrepreneurial project has become one of the more deeply explored elements in the empirical research, as it is considered one of the factors that more frequently constitute an obstacle to the decision of becoming an entrepreneur. This chapter tries to contribute to the measurement of the level in which the financial system and the institutions that regulate them favours or hinders the access to the entrepreneurial function, going over the institutions and mechanisms through which the financial system has an influence.
Mónica Carmona, Mario Cerdán, José María Millán
Chapter 16. Building a Statistical System on Entrepreneurship: a Theoretical Framework
Abstract
The search for a systematic set of indicators to measure the crucial dimensions of the entrepreneurship in relation to its diagnosis, forecast and tracking, has become a very first need for both the economic analysis progress, as well as to obtain an appropriate design, monitoring and evaluation of the public policies.
The main contribution of this study is to present a theoretical framework of reference that may be used as foundation to articulate a statistical subsystem of entrepreneurship indicators, a conceptual general framework that nourishes from the contributions and results, which are the core of the Economics of Entrepreneurship, and that allows us to determine the key dimensions and aspects to be captured by the system.
Emilio Congregado, Antonio Aníbal Golpe, José María Millán, Concepción Román
Metadata
Title
Measuring Entrepreneurship
Editor
Emilio Congregado
Copyright Year
2008
Publisher
Springer US
Electronic ISBN
978-0-387-72288-7
Print ISBN
978-0-387-72287-0
DOI
https://doi.org/10.1007/978-0-387-72288-7

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