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What makes a die-hard entrepreneur? Beyond the ‘employee or entrepreneur’ dichotomy

FitzRoy, Felix R.; Burke, Andrew E.; Nolan, Michael A.

Authors

Felix R. FitzRoy

Andrew E. Burke

Dr Michael Nolan M.A.Nolan@hull.ac.uk
Senior Lecturer in Economics and Programme Director, BSc Economics (Certificate and Diploma Stages) and BSc(Econ) Economics (Honours Stage)



Abstract

The article makes three contributions to the economics literature on entrepreneurship. We offer a new measure of entrepreneurship which accounts for variations in persistence in self-employment and as a result avoids the weakness of approaches which categorise an individual as an entrepreneur by observing their occupation at just one point in their career. We outline an econometric methodology to account for this approach and find, via a statistical test of model selection, that it is superior to probit/logit models, which have dominated the literature. While our results indicate that this existing literature is good at explaining an individual's propensity to try self-employment, we find that entrepreneurial persistence is determined by a different model and unearth some new insights. Early self-employment encourages entrepreneurial persistence. For men, inheritance encourages persistence, and facilitates initial self-employment. Having a self-employed father as a role model makes sons persist longer. However, somewhat surprisingly, early experience of unemployment does not affect the probability of self-employment, while reducing persistence. The popular 'unemployment push effect' is thus rejected in our sample.

Journal Article Type Article
Publication Date 2008-08
Journal SMALL BUSINESS ECONOMICS
Print ISSN 0921-898X
Electronic ISSN 1573-0913
Publisher Springer Verlag
Peer Reviewed Peer Reviewed
Volume 31
Issue 2
Pages 93-115
APA6 Citation Burke, A. E., FitzRoy, F. R., & Nolan, M. A. (2008). What makes a die-hard entrepreneur? Beyond the ‘employee or entrepreneur’ dichotomy. Small business economics, 31(2), (93-115). doi:10.1007/s11187-007-9086-6. ISSN 0921-898X
DOI https://doi.org/10.1007/s11187-007-9086-6
Keywords Economics and Econometrics; General Business, Management and Accounting