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Articles

Entrepreneurial Interest, Vision and the Self-employment Choice Decision in UK Regions

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Pages 1075-1090 | Received 01 Aug 2006, Published online: 11 Jan 2011
 

Abstract

Ashcroft B., Holden D. and Low K. Entrepreneurial interest, vision and the self-employment choice decision in UK regions, Regional Studies. This paper takes the standard model of self-employment choice and extends it to allow for differences in the potential for self-employment amongst employees. Four groups of entrepreneurs are hypothesized: actual, potential, latent, and non-entrepreneurs. Both the standard model and the ‘sequential’ model are estimated on a UK data set, allowing for both ‘super’ and standard region variations. The sequential model offers distinct advantages over the standard model. The results have implications for national and regional entrepreneurship policy because they reveal a clear distinction between the factors governing interest in entrepreneurship and those influencing start-up from within the interested group.

Ashcroft B., Holden D. et Low K. L'esprit d'entreprise, la vision et le choix du travail indépendant dans les régions du R-U, Regional Studies. Le point de départ de cet article est le modèle type du choix du travail indépendant, et on le développe afin de tenir compte des différences quant aux qualités nécessaires pour que les salariés puissent travailler à leur propre compte. On émet une hypothèse relative à quatre groupes d'entrepreneurs: des entrepreneurs réels, potentiels, latents et autres. Le modèle type et le modèle ‘séquentiel’, tous les deux, sont estimés à partir d'un ensemble de données pour le R-U, qui tient compte des variations dans les régions ‘super’ et les régions type. Le modèle séquentiel offre des avantages particuliers par rapport au modèle type. Les résultats soulèvent des implications pour les politiques nationale et régionale en faveur de l'esprit d'entreprise parce qu'ils laissent voir une distinction très nette entre les facteurs qui influent sur l'intérêt pour l'esprit d'entreprise et ceux qui influent sur la création d'entreprise au sein du groupe intéressé.

Travail indépendant Esprit d'entreprise Création d'entreprise Politique régionale

Ashcroft B., Holden D. und Low K. Interesse am Unternehmertum, unternehmerische Vision und die Entscheidung zur Selbstständigkeit in den Regionen Großbritanniens, Regional Studies. In diesem Beitrag erweitern wir das Standardmodell der Entscheidung zur Selbstständigkeit, um die Unterschiede hinsichtlich der Potenziale von verschiedenen Angestellten zur Selbstständigkeit zu berücksichtigen. Es werden vier Gruppen von Unternehmern hypothetisiert: tatsächliche, potenzielle, latente und Nichtunternehmer. Anhand eines Datensatzes aus Großbritannien werden sowohl das Standard- als auch das ‘sequenzielle’ Modell geschätzt, wobei die Abweichungen von ‘Super’- und Standardregionen berücksichtigt werden. Das sequenzielle Modell bietet gegenüber dem Standardmodell klare Vorteile. Die Ergebnisse wirken sich auf die nationalen und regionalen Grundsätze zur Unternehmensförderung aus, denn sie zeigen einen klaren Unterschied zwischen den Faktoren, die sich auf das Interesse am Unternehmertum auswirken, und den Faktoren, die innerhalb der interessierten Gruppe eine Unternehmensgründung beeinflussen.

Selbstständigkeit Unternehmertum Firmengründung Regionalpolitik

Ashcroft B., Holden D. y Low K. Interés empresarial, visión y la opción del empleo autónomo en las regiones británicas, Regional Studies. En este artículo tomamos el modelo estándar de la opción de empleo autónomo y lo ampliamos para tener en cuenta las diferencias en el potencial de trabajar por cuenta propia que tienen los empleados. Se muestran cuatro grupos de empresarios como hipótesis: empresarios actuales, potenciales, latentes y no empresarios. Se calculan tanto el modelo estándar como el modelo ‘secuencial’ en un conjunto de datos británicos, teniendo en cuenta las variaciones regionales ‘super’ y estándar. El modelo secuencial ofrece distintas ventajas en comparación con el modelo estándar. Los resultados afectan a la política empresarial tanto nacional como regional porque ponen de relieve una clara distinción entre los factores que gobiernan el interés empresarial y los que influyen en la creación de empresas dentro del grupo interesado.

Empleo autónomo Interés empresarial Creación de empresas Política regional

JEL classifications:

Acknowledgements

The research reported in this paper was funded by the Economic and Social Research Council (ESRC) (Grant No. R000221752). The authors also acknowledge the support of Scottish Enterprise. They are especially grateful for the detailed comments of one anonymous referee and acknowledge the comments of another anonymous referee. All errors and omissions are the responsibility of the authors alone.

Notes

1 The data were constructed from the records of interviews with a representative set of 2787 individuals in the UK conducted by the MORI organization for Scottish Enterprise as part of work in connection with its Business Birth-rate Strategy.

2 The results from an estimation of the ordered probit approach are not presented here, but are available from the authors on request.

3 Some studies (e.g., Rees and Shah, Citation1986) have attempted to estimate the structural form of the ‘standard’ model where adequate earnings data are available.

4 For a review of the role of psychological characteristics in entrepreneurial research, see Amit et al. Citation(1993). These authors identify four psychological traits that have been the subject of much research interest: the need for achievement, an above-average risk-taking propensity, an internal locus of control, and a tolerance of ambiguity.

5 Of course, in many cases this process may happen simultaneously, but the authors believe it is analytically useful to view the process as sequential.

6 For example, if a variable has an associated negative in b1 and a positive in b2, an increase in the variable will increase P(latent).

7 For example, an increase in a variable with a positive element in b leads to a decrease in P(NI) and an increase in P(SE). The implications for P(L) and P(P) are ambiguous.

8 The probit approach is recovered by aggregating the NI, L and P into a single group. Clearly, (9) is playing a similar role to (4) in the standard model.

9 Perhaps as a consequence Amemiya (Citation1975, p. 293) argues: ‘The use of the ordered model is less common in econometric applications than in biometric applications. This must be due to the fact that economic phenomena are complex and difficult to explain in terms of a single unobserved index variable.’ However, the flexibility of the sequential approach comes at the cost of reduced degrees of freedom.

10 Launched in 1993.

11 A copy of the survey questions can be obtained from the authors on request.

12 Approximately 44% of the sample was interested in founding a firm, including 170, or 18% of the total, who had actually set up their own firm. Within the interested group, 33% could be classified as latent entrepreneurs and 26% as potential entrepreneurs. The remaining 41% of the interested group were actually running their own firm.

13 Statistical significance is defined by an absolute ‘t’ > 1.96.

14 When standard regions are used rather than ‘super’ regions, the statistically significant non-location variables remain the same except for the disappearance of CHILD4 and the appearance of PLUMBER. Of the location variables, only SW and LO are significant.

15 The results of the restricted estimation are not presented here. The detailed results of all the estimations discussed in this paper can be obtained from the authors on request.

16 For more details on the estimation of sequential probits, see Maddala (Citation1983, pp. 49–51).

17 The reduced number of observations necessitated combining the AGE6064 and AGE65 + groups into a single group: AGE60 + .

18 The regions excluded on statistical significance grounds all have a greater likelihood of self-employment than the default region, Scotland, with the exception of Wales. This issue is considered further in the marginal experiments later in the paper.

19 For a discussion of comparing actual and predicted outcomes in this way, see Maddala (Citation1983, pp. 76–77).

20 For example, in the first block, MALE is compared with FEMALE, with all other explanatory variables set at the sample average. The estimation of the standard model features ‘super’ regions, hence the constancy of the reported probability across the constituent standard regions evident in – see, for example, the SC, NO, and WA rows. However, for the sequential model these probabilities do vary due to the ‘super’ region restrictions being unacceptable and, therefore, not imposed at the start-up stage.

21 These results, of course, beg the question why females were less interested in self-employment.

22 The authors are grateful to an anonymous referee for suggesting the latter two possibilities.

23 Examples of the policies adopted by Scottish enterprise in an attempt to influence the culture and attitudes towards entrepreneurships included: press campaigns, a business game television series, several books on model Scottish entrepreneurs ‘Local Heroes’, a ‘Year of the Entrepreneur’, New Model Schools Enterprise programmes, university entrepreneurship centres, and the creation of an Entrepreneurial Exchange with significant private sector involvement allowing easy access to entrepreneurs, mentoring and information.

24 This can be attempted by developing both formal and informal networking structures, such as the private sector-led Entrepreneurial Exchange in Scotland, and offering advice forums such as Personal Enterprise Shows. These were pioneered in Scotland by Scottish Enterprise and were part of the Personal Enterprise project, a national Road Show, marketed through a television-led advertising campaign, with local exhibitions (the Personal Enterprise Show), and a follow-up programme delivered by Local Enterprise Companies. The Personal Enterprise Show is designed to offer inspiration and motivation on starting a business, including start-up Factbooks, access to entrepreneurs and advisers, and a self-assessment questionnaire (on a computer) to help participants test their entrepreneurial capabilities.

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