COMPENDIA: Harmonizing business ownership data across countries and over time

This paper presents a harmonized data set over the period 1972-2002, 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, which means COMParative ENtrepreneurship Data for International Analysis. It has been constructed by EIM Business and Policy Research, using OECD statistics (in particular OECD Labour Force Statistics) as well as other relevant sources. We make an attempt to make business ownership rates comparable across countries and over time. This is not straightforward as different countries measure business ownership or self-employment in different ways. The definition used in COMPENDIA includes both the unincorporated and the incorporated self-employed. This paper describes the methodology used for constructing the COMPENDIA data base. It also presents the business ownership rates for the 23 countries. Special attention is paid to the United States. This country alone accounts for about 30% of all self-employed reported in the COMPENDIA data set.

Determinants of employment in Europe, the USA and Japan, The

Onderzoek naar de determinantsverschillen in werkgelegenheid tussen Europa, Japan en de Verenigde Staten. Voor Europa is ook onderscheid gemaakt naar de verschillende subsectoren in de industrie.

The relationship between start-ups, market mobility and employment growth: An empirical analysis for Dutch regions

Recent literature suggests that two types of competition may contribute to macro-economic performance: the extent of new-firm entry and the extent of competition among incumbent firms. In the present paper we explain employment growth at the region-sector level using direct indicators for both these types of competition -the start-up rate and the market mobility rate- as main independent variables. While previous studies in this field measured competition among incumbent firms in an indirect way, we use a direct measure called market mobility. The empirical analysis reiterates existing results in that we find the long-term economic effect of start-ups to be bigger than the short-term effect. We also find empirical indications that this long-term effect consist of two significant parts. First, the most successful start-ups grow out to become high-growth firms, and second, the entry of new firms stimulates incumbent firms to perform better. �

Knowledge Spillovers and Economic Growth; an analysis using data of Dutch regions in the period 1987-1995

The importance of knowledge spillovers for achieving innovation and economic growth is widely recognised. It is not straightforward which type of spillovers is most effective: intra-sectoral spillovers or inter-sectoral spillovers. We investigated this controversy using a model of regional growth. The model also deals with the impact of local competition on innovation and growth. The model is estimated using sectoral data for 40 Dutch regions. We found that local competition is important particularly for economic growth in industry sectors (manufacturing and construction), while diversity, a proxy for inter-sectoral spillovers, is important particularly for growth in service sectors. We found no effect for specialisation (a proxy for intra-sectoral spillovers).

The Entrepreneurial Adjustment Process in Disequilibrium

Despite the fact that the main contribution of entrepreneurship theory to economics has been to provide an account of the performance of markets in disequilibrium, little empirical research on entrepreneurship has examined firm entry and exit in this context. In this paper, we attempt to redress this by modelling the interrelationship between firm entry and exit rates in disequilibrium. Using a data base of Dutch retail industries over the period 1980-2001, we are able to distinguish between displacement (entry causing exit) and replacement (exit causing entry) effects. We introduce a new methodological approach which allows us to investigate whether the relations under consideration differ between situations of undershooting’ (the actual number of firms is below the equilibrium number) and ‘overshooting’ (vice versa). We find that the equilibriumrestoring mechanisms are different in these two situations – being faster in over than undershoots. Our estimation results also imply that for undershooting, a lack of competition between incumbent firms contributes to restoration of equilibrium (creating room for new-firm entry) while in overshooting competition induced by new firms (in particular strong displacement) causes the number of firms to move towards equilibrium. The research helps to embed entrepreneurship theory into mainstream economics in a manner that adds greater insight into the performance of markets in disequilibrium.

The Role of Export-Driven New Ventures in Economic Growth: A Cross-Country Analysis

We investigate the relationship between a country’s prevalence of new ventures and its rate of economic growth, while distinguishing between export-oriented new ventures and domestic new ventures. It is generally acknowledged that new venture creation as well as export activity may both be important strategies for achieving national economic growth. However, to our knowledge no attempt has been made to empirically investigate the role of export-driven new ventures in economic growth. We focus on the national level and use data from the Global Entrepreneurship Monitor for a sample of 36 countries. Our results suggest that a country’s prevalence of export-driven new ventures is significantly positively related to economic growth, whereas the prevalence of new ventures that focus exclusively on domestic market sales shows no significant relation to national growth.

An empirical analysis of business dynamics and growth

This paper examines the relationship between business dynamics (entry and exit of firms) and employment growth at the country-industry level. We use a cross-country data set with harmonized data on numbers of entries and exits for a selection of fastgrowing and innovative industries in six developed economies. In our regression analysis we allow for separate effects of both the extent of business dynamics (volatility of firms) and the composition of business dynamics (net-entry of firms). We also test for the existence of an 'optimal' level of business volatility, possibly indicating that entry and exit levels are too high in certain industries. We find positive employment effects of net-entry rates and volatility rates. These effects are found to be considerably stronger for manufacturing compared to services. We find no evidence for an 'optimal' level of business volatility. �

Entrepreneurial diversity and economic growth

We investigate the impact of entrepreneurial diversity on national economic growth. More specifically, using data for 36 countries participating in the Global Entrepreneurship Monitor, we investigate whether the impact of entrepreneurial activity is different for different sociodemographic groups. Diversity is measured in terms of age, education and gender. We find that in less developed countries, older and higher educated entrepreneurs are particularly important for stimulating economic growth, while for highly developed countries the contribution of younger entrepreneurs is more important. We do not find evidence for a differential contribution of female and male entrepreneurs.

Business Ownership and Sectoral Growth: An Empirical Analysis of 21 OECD Countries

We investigated the development of business ownership (self-employment) rates over time at the sectoral level and the effect of these rates on sectoral output growth. In an earlier exercise, Carree et al. (2002) presented an analysis of the interrelationship between economy-wide business-ownership rates and economic development. Their analysis raised an important research question: To what extent do differences in business ownership rates at the economy-wide level reflect differences in the sectoral structures of economies or differences in business-ownership rates at the sectoral level? The current paper investigates this question making use of a sectoral database of 21 OECD countries for the 1970-98 period. Estimation results suggest that there is, on average, a too low business-ownership rate in manufacturing and a too high business ownership rate in services. This paper was previously published as Research Report H200206. Compared to the earlier version, it specifically elaborates the theoretical foundation of the estimated model in more detail.

The More Business Owners the Merrier? The Role of Tertiary Education

Policy in developed countries is often based on the assumption that higher business ownership rates induce economic value. However, not everyone can be a business owner and many labour market participants would contribute more to economic value creation as an employee than 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, 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 find indeed robust evidence of an optimal business ownership rate. Second, the optimal business ownership rate tends to decrease with participation rates in tertiary education.