Cross-country differences in self-employment rates: the role of institutions

Torrini, Roberto

doi:10.1016/j.labeco.2004.02.010

Cited by 199 publications

(89 citation statements)

References 36 publications

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“…Halabisky et al (2006) explicitly investigate the development of wages in HGFs compared to other firms with the purpose to examine the validity of the argument that the job contribution of smaller firms is less valuable since they pay lower wages than larger firms. They find that larger firms paid higher wages, but -consistent with the other studies reported in 52 These opposing effects are also consistent with the findings of Robson (2003) and Torrini (2005), who do not find any relationship between the rate of self-employment and the degree of regulation of labor markets in rich countries. 53 Garen (1985) and Kremer (1993) develop theoretical models that explain the systematic sorting of more productive workers to larger employers as an efficiency-enhancing outcome in economies with heterogeneous, imperfectly substitutable labor.…”

Section: Wage-setting Institutionssupporting

confidence: 86%

Competencies and Institutions Fostering High-growth Firms

Henrekson

Johansson

2007

FNT in Entrepreneurship

105

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High-growth firms (HGFs) are critical for net job creation and economic growth. We analyze HGFs using the theory of competence blocs, linking firm growth to property rights and the interaction of complementary expertise. Specifically, we discuss how the institutional framework affects the prevalence and performance of HGFs. Firm growth is viewed as resulting from the perpetual discovery and use of productive knowledge. A key element in this process is the competence bloc, a nexus of economic actors with complementary competencies that are vital in order to generate and commercialize novel ideas. The institutional framework determines the incentives for these individuals to acquire and utilize knowledge. We identify a number of institutions that foster the emergence of competence blocs and the creation of HGFs. In particular, our analysis points to the pivotal roles played by tax structures, labor market regulation, and the contestability of currently closed service markets. Finally, we characterize institutions beneficial for sclerotic or dynamic capitalism, respectively, depending on whether they provide a favorable environment for the emergence of competence blocs and the creation of HGFs.

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Section: Wage-setting Institutionssupporting

confidence: 86%

Competencies and Institutions Fostering High-growth Firms

Henrekson

Johansson

2007

FNT in Entrepreneurship

105

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“…with the findings of Robson (2003) and Torrini (2005), who do not find any relationship between the rate of self-employment and the degree of regulation of labor markets in rich countries.…”

supporting

confidence: 66%

Entrepreneurship and Institutions

Henrekson

2007

SSRN Journal

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In this paper entrepreneurs are defined as agents who bring about economic change by combining their own effort with other factors of production in search of economic rents. The institutional setup is argued to determine both the supply and direction of entrepreneurial activity. Four key institutions are explored more closely: property rights protection, savings policies, taxation and the regulation of labor markets. Institutions have far-reaching effects on entrepreneurship, and they largely determine whether or not entrepreneurial activity will be socially productive. Due to the responsiveness of entrepreneurship to the institutional setup it is maintained that in-depth analyses of specific institutions are required in order to further our understanding of the determinants of entrepreneurial behavior and the economic effects of entrepreneurship. The paper also demonstrates that it is problematic to use self-employment as an empirical proxy for productive entrepreneurship.JEL Codes: H32; L5; L25; M13; O31; P14.

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“…Although scholars often focus on economic and policy-level factors, such as tax rates and other governmental regulations, in explaining variation in entrepreneurship (e.g., Eesley, 2009;Torrini, 2005), evidence of the importance of cultural or normative sources can be found in a number of studies as well (Davidsson & Wiklund, 1997;Fairlie & Meyer, 1994). For example, Vaillant and Lafuente (2007) trace the relatively high rates of entrepreneurship in rural Catalonia (compared to other rural areas of Spain) to Catalonia's distinctive constellation of cultural values.…”

Section: Group-based Variation In Rates Of Entrepreneurshipmentioning

confidence: 99%