Potential Entrepeneurs and the Self-Employment Choice Decision

In this paper we estimate, on a dataset for the UK, a standard model of self-employment choice. The model is then extended to allow for differences in the potential for self-employment amongst employees. Specifically, we recognise four relevant groups: actual entrepreneurs, potential entrepreneurs, latent entrepreneurs, and non-entrepreneurs. This hypothesised division allows the incorporation of insights from the sociological and psychological literature on entrepreneurship, as well as the more usual economic and socio-demographic variables. The two models appear reasonably robust on statistical grounds. The predictive performance of the standard and sequential models is similar, although both models tend to under predict the number of self-employed. Nevertheless, we believe that the sequential model offers some distinct advantages over the standard model. In separating out the determinants of interest from the idea and firm formation decisions, the model identifies a set of characteristics that are necessary for start-up i.e. the factors determining interest, but which are not sufficient. In the standard model, the necessary and sufficient conditions are assumed to be identical. The results have implications for policy because they reveal a clear distinction between the factors governing interest in entrepreneurship and those influencing start-up from within the interested group

An Empirical Examination of the R&D Boundaries of the Firm - a Problem-solving Perspective

We consider, both theoretically and empirically, how different organization modes are aligned to govern the efficient solving of technological problems. The data set is a sample from the Chinese consumer electronics industry. Following mainly the problem solving perspective (PSP) within the knowledge based view (KBV), we develop and test several PSP and KBV hypotheses, in conjunction with competing transaction cost economics (TCE) alternatives, in an examination of the determinants of the R&D organization mode. The results show that a firm’s existing knowledge base is the single most important explanatory variable. Problem complexity and decomposability are also found to be important, consistent with the theoretical predictions of the PSP, but it is suggested that these two dimensions need to be treated as separate variables. TCE hypotheses also receive some support, but the estimation results seem more supportive of the PSP and the KBV than the TCE

The convenient calculation of some test statistics in models of discrete choice

The paper considers the use of artificial regression in calculating different types of score test when the log-likelihood is based on probabilities rather than densities. The calculation of the information matrix test is also considered. Results are specialised to deal with binary choice (logit and probit) models

Wages and employment : issues and evidence

The present Government has laid considerable emphasis on the notion that workers can, and indeed should, "price themselves into jobs", an emphasis apparently vindicated by the Treasury's recent review of empirical evidence concerning the relationship between employment and wages. In this article we attempt to provide a non-technical guide to the major economic issues involved in this debate, and to provide a necessarily selective account of the empirical evidence relevant to these issues. We begin by examining one major aspect of the debate: the response of firms' demands for labour to changes in the real wage

The regional density function and the definition of regional boundaries

The population density function is usually applied at the level of the urban or metropolitan area. In this chapter, however, it is examined at the scale of the region, namely, an economic region of a nodal (rather than homogenous) type. The regional density function to be employed has an inverse power form. This is shown to differ significantly from the negative exponential structure typically associated with urban areas. The primary purpose of the investigation is to explore the possibility of using the density function as a means of determining the boundary between adjacent economic regions. Initially, the boundary is examined in terms of a point and then, more conventionally, as a line. After discussing several possible extensions, the results are compared with findings of other theoretical models concerned with the specification of boundaries, but based on wholly different approaches