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| Author: | Bosma, N. Wit, G. de Carree. M. |
| Title: | Modelling entrepreneurship: Unifying the equilibrium and entry/exit approach |
| Journal: | Small business economics
2005 : AUG, VOL. 25:1, p. 35-48 |
| Index terms: | Entrepreneurship Small business Market entry Market exit Self-employment Unemployment Models Netherlands |
| Language: | eng |
| Abstract: | There are two approaches distinguished with respect to modelling entrepreneurship (hereafter as: e-ship.): the approach focusing (i.) on the net development of the number of entrepreneurs (here as: entrns.) in an equilibrium framework and (ii.) on the entries and exits of entrns. This paper unifies these approaches to arrive at a model explaining the equilibrium and actual number of entrns. and the entry and exit rate of entrns. simultaneously and consistently. The unified approach is applied to the Netherlands using self-employment data for the 1960-1999 period. It is found error-correction of about 20 percent annually etc. Periods of high unemployment appear to be characterized by both high entry and high exit rates. |
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