Is Entrepreneurship a Route Out of Deprivation?

Abstract

Frankish J. S., Roberts R. G., Coad A. and Storey D. J. Is entrepreneurship a route out of deprivation?, Regional Studies. This paper investigates whether entrepreneurship constitutes a route out of deprivation for those living in deprived areas. The measure of income/wealth used is based on an analysis of improvements in an individual's residential address. The data consist of information on over 800 000 individuals, and come from the customer records of a major UK bank. Comparing business owners with non-owners, the results suggest that the benefits of business ownership are found across the wealth distribution. Hence, entrepreneurship can be a route out of deprivation.

Frankish J. S., Roberts R. G., Coad A. and Storey D. J. 创业精神是否为脱贫的途径，区域研究。本文探究创业精神是否为生活在贫困地区的人们提供了脱贫的途径。本研究所使用的收入／财富评量，是根据个人居住地址的提升所进行的分析。研究数据包含超过八十万人的信息，以及英国一个主要银行的顾客纪录。企业主与非企业主的比较结果显示，各阶层财富分佈皆可发现拥有企业的益处。因此，创业精神是一个脱贫的途径。

Frankish J. S., Roberts R. G., Coad A. et Storey D. J. L'entrepreneuriat, est-ce un moyen de sortir de la privation?, Regional Studies. Cet article examine si, oui ou non, l'entrepreneuriat constitue un moyen de sortir de la privation pour ceux qui habitent les zones défavorisées. La mesure du revenu/de la richesse employée est fondée sur une analyse des améliorations des lieux de résidence des individus. Les données comprennent des informations auprès de 800 000 individus et proviennent des dossiers-clients d'une grande banque au R-U. Lorsque l'on compare les chefs d'entreprises aux non-propriétaires, les résultats laissent supposer que les avantages d’être chef d'entreprise sont évidents à travers la distribution de la richesse. Par la suite, l'entrepreneuriat pourrait s'avérer un moyen de sortir de la privation.

Frankish J. S., Roberts R. G., Coad A. und Storey D. J. Bietet Unternehmertum einen Weg aus der Benachteiligung?, Regional Studies. In diesem Beitrag wird untersucht, ob das Unternehmertum für die Bewohner von benachteiligten Gegenden einen Weg aus der Benachteiligung bietet. Der Maßstab für das Einkommen bzw. Vermögen beruht auf einer Analyse der Verbesserungen hinsichtlich des Wohnsitzes einer Privatperson. Die Daten stammen von den Kundenakten einer britischen Großbank und beziehen sich auf mehr als 800.000 Privatpersonen. Aus den Ergebnissen eines Vergleichs zwischen Geschäftsinhabern und anderen Personen geht hervor, dass der Nutzen von Unternehmenseigentum im gesamten Spektrum der Vermögensverteilung zu finden ist. Unternehmertum kann also einen Weg aus der Benachteiligung bieten.

Frankish J. S., Roberts R. G., Coad A. y Storey D. J. ¿Ofrece el espíritu empresarial una vía para salir de la marginalidad?, Regional Studies. En este artículo examinamos si el espíritu empresarial constituye una vía para que las personas que viven en zonas pobres puedan salir de la marginalidad. Hacemos una medición de los ingresos o la riqueza basándonos en un análisis sobre las mejoras en la dirección residencial de particulares. Los datos proceden de los registros de clientes de un importante banco británico y contienen información sobre más de 800.000 personas. Al comparar los datos de propietarios de negocios con los de otras personas, los resultados indican que ser propietario de un negocio confiere beneficios en todo el espectro de la distribución de la riqueza. Esto significa que el espíritu empresarial sí que puede ser una vía para salir de la marginalidad.

• Deprived areas
• Entrepreneurship
• Public policy
• Housing
• Deprivation

• 贫困地区
• 创业精神
• 公共政策
• 住房
• 贫困

• Zones défavorisées
• Entrepreneuriat
• Politique publique
• Logement
• Privation

• Benachteiligte Gegenden
• Unternehmertum
• Öffentliche Politik
• Wohnungswesen
• Benachteiligung

• Zonas marginales
• Espíritu empresarial
• Política pública
• Vivienda
• Miseria

JEL classifications:

• J23
• M13
• R23

Acknowledgements

This article was presented at staff seminars in the UK at Sussex and the Work Foundation. The authors are grateful to Neil Lee, Rebecca Liu and two anonymous referees for many helpful comments. J. S. F. and R. G. R. wrote only in a personal capacity and do not necessarily reflect the views of Barclays Bank. Any remaining errors are the authors’ alone.

Funding

A. C. gratefully acknowledges financial support from the Economic and Social Research Council (ESRC), Technology Strategy Board (TSB), Department for Business, Innovation & Skills (BIS) and the National Endowment for Science, Technology and the Arts (NESTA) [grant numbers ES/H008705/1 and ES/J008427/1] as part of the Innovation Research Centre (IRC) distributed projects initiative, as well as from the Arts & Humanities Research Council (AHRC) as part of the FUSE project.

Notes

1. ‘Since 2006 around £150 million has been committed to implement proposals from England's most deprived local authorities to support enterprise initiatives. A further £280 million will be committed between 2008 and 2011’ (BERR, 2008, p. 89).

2. There are 150 steps up the ranking here ordered in integer steps, corresponding to the 150 local areas.

3. The IMD ranking used is for 2010. Focus is on the period 2006–11, comprising both an economic boom and the subsequent crisis. This may affect the generality of the findings.

4. The aggregate findings for ‘All areas’ (with employees slightly more likely to move up than owners) do not match the results found for each quintile taken individually. This is a sample composition effect – business owners are more numerous in the highest quintiles where the proportion moving up is lower.

5. One possible explanation for this could be income differences, which cannot be controlled. This is recognized here, but it should be emphasized that those with very low incomes are excluded because only those known to be in employment are included amongst the non-owners. To have included the unemployed and the economically inactive would have widened the differences between business owners and all other residents.

6. As with the model for change of residential address, there is no accounting for incomes.

7. Recall that owners in quintile 5 are also more likely to have multiple businesses, hence the use of the term ‘aggregate’.

8. It was not easy finding an instrument for the selection equation because many of the variables that predicted ‘move’ also predicted ‘up’. Furthermore, Heckman models make a number of other assumptions that can be problematic, such as the assumption of bivariate normality. However, taking the number of businesses as the instrument, a Heckman probit was estimated and similar results were obtained.

9. Some individuals are associated with more than one legal form by virtue of owning multiple businesses, and so there is no need for an omitted baseline legal form.

10. Other options include comparisons with, for example, two possible random process benchmarks – the ‘dartboard’ approach, and the random walk. The dartboard model is where there is an equal chance of landing in each part of the ‘dartboard’ or region, hence an implicit uniform distribution. So, if there are 80% of regions above, there is an 80% chance of moving up. Alternatively, according to the random walk model, there is the same probability of moving up as moving down – hence, a 50% chance of moving up and 50% chance of moving down – irrespective of the starting point. It is suspected that the true process governing the dynamics of moving up has characteristics of both processes and is an issue requiring further work.