Entrepreneurship, Competitiveness and Local Development

Entrepreneurship, Competitiveness and Local Development

Frontiers in European Entrepreneurship Research

Edited by Luca Iandoli, Hans Landström and Mario Raffa

This book draws together leading academics to provide a state-of-the-art overview of the key challenges to entrepreneurship in Europe.

Chapter 2: Unemployment in a Model of Entrepreneurship in Belgium: Empirical Evidence from the Global Entrepreneurship Monitor

Stijn Bruyneel, Martin Carree and Ludo Peeters

Subjects: business and management, entrepreneurship

Extract

Stijn Bruyneel, Martin Carree and Ludo Peeters INTRODUCTION Over the past few years, entrepreneurship1 has become a central target for policy makers and economic researchers. Recently, several studies have identified the contribution of entrepreneurship to unemployment reduction and economic growth. However, unemployment has also been identified as an antecedent of entrepreneurship. The relationship between previous unemployment status and entrepreneurship has led to the opposing concepts of necessity- and opportunity-based entrepreneurship. Although both concepts have been widely accepted, empirical evidence has produced mixed results so far. One possible explanation for this flaw in the empirical literature is the impact of the level at which research has been conducted. Unemployment can be an antecedent of entrepreneurship at the individual, regional or national level. Although the impact of entrepreneurship is expected to be different depending on the level of analysis, most studies do not acknowledge this difference. We look at entrepreneurship from an individual perspective, in search of a possible relation between the employment status of the individual and his or her probability of becoming an entrepreneur. We question whether individuals are driven by unemployment when they decide to start up their own firm, or whether they are just as likely to start their own firm as their employed counterparts. We make use of the Global Entrepreneurship Monitor (GEM), which provides a unique dataset for testing the influence of the employment status on the probability of becoming an entrepreneur. The most recent publicly available Belgian data for 2001...

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