Job Creation by the Self-employed: The Roles of Entrepreneurial and Financial Capital

Andrew Henley

Research output: Contribution to journalArticlepeer-review

78 Citations (Scopus)

Abstract

The paper reports micro-econometric evidence on the factors that influence the ability of the small businesses to create employment. It uses data on self-employment from a British panel survey. In particular it investigates the contributions of financial and entrepreneurial capital to job creation. Housing wealth appears to be significantly associated with small business job creation. It appears to act as an important source of financial collateral. The parental background of the small business owner is also significantly associated with job creation. Successful entrepreneurs are more likely to have had self-employed parents, and in particular parents who employed others. Educational attainment, in particular at degree level, is also important. The preferred model incorporates individual random effects and the significance of these suggests the importance of unobserved latent entrepreneurial ability.
Original languageEnglish
Pages (from-to)175-196
JournalSmall Business Economics
Volume25
Issue number2
DOIs
Publication statusPublished - 01 Sept 2005

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