PUBLISHED PAPERS

Abstract: This study aims to revisit the relationship between the stringency of employment protection legislation and entrepreneurship at the macro-level using time series data from 28 OECD countries. To address model uncertainty, a Bayesian model averaging methodology is employed, overcoming issues related to predictor selection. Additionally, the study delves into the interaction between employment protection legislation and the rule of law, considering potential unintended consequences and overlapping effects. Heterogeneity within self-employment is explored, making a distinction between solo self-employment and employer entrepreneurship. The findings reveal that the impact of employment protection legislation, both for regular and temporary employment, on aggregate solo self-employment rates is contingent upon the level of practical regulatory compliance. The legislation can either stimulate or hinder entrepreneurship, highlighting the nuanced nature of its influence on macro-level entrepreneurial activities. The results of this study provide valuable insights for policymakers and regulators by emphasizing the complexity of the relationships under consideration.Understanding the potential interactions between employment protection legislation, rule of law and practical regulatory compliance is crucial for designing an effective and conducive regulatory environment for entrepreneurship. This research offers a unique contribution to the literature in three distinct ways: by addressing model uncertainty through Bayesian model averaging, examining the interaction between employment protection legislation and the rule of law and differentiating between solo self-employment and employer entrepreneurship. These distinctive elements enhance the originality and value of the study, providing a more nuanced understanding of the intricate relationship between legal frameworks and macro-level entrepreneurship.

Keywords: Entrepreneurship · Self-employment · Institutions · Employment protection legislation · Stringency · Compliance · Enforcement · Bayesian model averaging

JEL Classificatioon: C11 · C23 · J23 · J24 · J38 · J40 · K31 · L26 · M13

Abstract: Understanding the worldwide drivers of qualified entrepreneurship is a key issue in economic policy design. To help policy decisions exert their intended impact, we aim to cluster a wide range of countries on the basis of their levels and trends in self-employment productivity using a finite mixture model applied to a new large dataset of 121 countries covering the period of 1991-2019. Our results point to three groups of high-, medium-, and low-productive means and tendencies, the geographical distribution of which suggests that they can be reinterpreted using the three stages of economic development, namely, innovation-, efficiency-, and factor-driven economies. Notably, we find that widespread digitalization and low unemployment enhance the probability of transitioning into a highly productive cluster. However, we failed to find that industry weight or employment protection legislation strictness serve as determinants in the transition between groups. Suggestive rationales for these results and implications for the entrepreneurship policy agenda are also provided.

Keywords: Entrepreneurship · Productive self-employment · Model-based clustering · Finite mixture models · Cross-country analysis · Transition probabilities

JEL Classification: M13 · J24 · C11 · O43

Abstract: We re-evaluate the relationship between stages of economic development and entrepreneurship, at the macro level. We first conduct a literature review of previous empirical research on cross-country determinants of entrepreneurship in order to put our contribution in perspective. To circumvent problems related to model uncertainty we use Bayesian Model Averaging (BMA) to evaluate the robustness of determinants of economic growth in a new dataset of 117 countries in the 2005-2019 period, allowing fixed effects and investigating the existence of heterogeneity allowing interactions of our focus variable with other regressors. Our empirical analysis then shows that the variation of self-employment rates across countries are mainly determined by variations in the unemployment, the stage of economic development and the variations in labor market frictions. When interactions are taken into account, results confirm that there is a differential effect of labor market frictions in countries with different levels of income. Frictions in labor market may encourage becoming self-employed in richer countries.

Keywords: Bayesian Model Averaging · Entrepreneurship · Macro-level Determinants · Model Uncertainty · Panel · Self-employment

Abstract: A growing body of empirical literature—both on the micro and macro scale—is devoted to exploring the existence of hysteresis—or at least persistence—in self-employment, i.e., whether policy, economic or external shocks have transitory or persistent effects on the probability of survival, and in turn, on the natural rate of self-employment. In aggregate time series studies, the usual method to address this issue has been to look for unit roots by using alternative tests or by using unobservable components models. In this research, we performed a battery of tests and competing approaches to check the robustness of our results with UK self-employment time series. The UK is a suitable case for study because the recent evolution of the UK self-employment rate figures shows a steady growth since the beginning of the millennium. This long-term rise in UK self-employment has attracted the attention of scholars, at least, before the Great Lockdown. We find evidence of hysteresis, while business cycle output variations significantly affect self-employment rates. The article discusses the implications of the findings.

Keywords: Persistence · Unobserved components model · Time series models · Business cycles · Self-employment · Entrepreneurship · UK

Abstract: This article analyses the business cycle dynamics in the European Union (EU28) during recent decades. Following Camacho et al. (J Econ Dyn Control 30:1687– 1706, 2006), we extend the analysis of European cycles to a broader range of coun‑ tries, including new entrants. In addition, we update their sample by including the Great Recession data with the aim of exploring whether the financial crisis led to changes in cyclical features across these countries. Our results indicate that the Great Recession has undermined European cyclical linkages. Notably, we succeeded in detecting that the European economies do not follow more closed dynamics, despite the fact that the countries are showing more similar cyclical characteristics. 

Keywords: Business cycle characteristics · Cyclical synchronization · European Union enlargement 

JEL Classification: C5 · E32 · F02 · C22