the influence of motivations and environment on business start ups some hints for public policies abstract this paper examines entrepreneurial motivations to start a business in different perceived environmental settings motivations to start a business for a sample of 163 entrepreneurs from growing and declining regions in the north center and south of italy were factor analysed in order to identify the main groupings of variables that lead people to start their own business the results proved to be highly consistent with friberg s 1975 1976 findings on incentives to start a business the motivation factor scores were then clustered and three verv different classes of entrepreneurs were identified each driven by very different sets of motivations self actualizers who started their business driven by a thirst for achievement and a sense of independence and autonomy discontented entrepreneurs unhappy with present working conditions and followers of family tradition role models the relationship between individuals motivations and their perceptions of the environment was then investigated resources and incentives to start a business were factor and cluster analyzed to yield three very different types of perceived environments munificent environments characterized by efficient infrastructures established capital markets and the availability of incentives to start a business supportive environments in which the creation of an infrastructure specifically aimed at encouraging new companies could lead to a significant increase in entrepreneurship sparse environments lacking both infrastructure and capital availability the proportions of entrepreneurial types differ significantly in each environment government intervention in stimulating the diffusion of entrepreneurship is legitimized by the role new companies play in job and wealth creation and the diffusion of innovation within a territory these results suggest some implications for public policies instead of blanket incentive policies applied on a wide geographical basis policies tailored on a local basis may be more effective in stimulating new venture creation

relative price variability and nonuniform inflationary expectations using a generalization of a rational partial information framework presented fully in cukierman and wachtel 1979 it is shown that there is a positive relationship between the variance of relative price change and the variance of inflationary expectations across markets in the economy this implication is then tested empirically using data on the variance of relative price change and on the variance of directly measured expectations the empirical evidence supports the view that there is a positive relationship between the two variances and that more than one third of this relationship is explainable in terms of the model presented

agroclimatic shock income inequality and poverty evidence from burkina faso abstract this paper examines the impacts of agroclimatic shock on income inequality and poverty using household farm data from three agroecological zones of burkina faso together with income source decompositions of the gini coefficient and the foster greer thorbecke poverty index before and after a severe drought our findings reveal that because the poor lack acces to off farm income off farm income increases inequality and fails to shield poor households against agroclimatic risks the direction of the empirical relationship between changes in inequality and poverty after the drought depends critically on environmental variables and on apparent constraints on income diversification at different points in the income distribution

shocks consumption and income diversification in rural ethiopia abstract we present new evidence that households are unable to protect themselves from rainfall failure that occurs on average every five years in rural ethiopia however other less extreme rainfall variation and idiosyncratic shocks such as illness and crop pests do not impact significantly on consumption agricultural shocks impact negatively on farm income as expected however they also stimulate non agricultural earnings by an equivalent amount in the case of a covariate shock such as severe rainfall failure this smoothing mechanism may be ineffective and rainfall insurance or drought triggered safety nets could provide further protection

a confirmation of the relation between inflation and relative price variability richard parks s 1978 analysis of the relationship between inflation and relative price variability has already become something of a classic in the applied macroeconomics literature the paper is widely cited for its multimarket model from which a quadratic relationship between the variance in relative price changes vp on the one hand and the variance of the unexpected rate of inflation dp dp and real income growth dy dp on the other hand heretofore only specified in ad hoc fashion was rigorously derived nevertheless since the empirical relationship between these variables had already been well established in the literature not only for the united states but also for such countries as argentina australia canada japan and other organization for economic cooperation and development oecd countries parks s relatively weak empirical results may have or should have seemed somewhat disappointing specifically while the explanatory power of parks s empirical model was quite high r2 896 for one of his two sample periods namely the relatively short prewar period 1930 41 it was considerably lower r2 667 for the other sample period namely the relatively long postwar period 1948 75 although hercowitz 1981 and others refer to the results as providing a strong positive correlation between unexpected inflation and price dispersion closer inspection reveals that no more than one of the three terms involving the unexpected rate of inflation is significant at the 5 percent level either in the individual subperiods or in their combination moreover in the case of the postwar sample the results of which for convenience are reproduced in column 1 of table 1 even the single coeffi

using evidence of household income diversification to inform study of the rural nonfarm labor market in africa abstract the labor market literature in developing countries has seldom drawn on the studies of rural household income diversification this paper draws on such studies to inform future study of the rural nonfarm labor market in africa the review of evidence provides some surprising departures from traditional images of nonfarm activities of rural households among the most striking is the dominant importance in the majority of case study areas of nonfarm wage labor as compared to self employment of nonfarm sector earnings as compared to farm sector wage earnings and of local nonfarm earnings as compared to migration earnings the most worrying finding was the poor distribution of nonfarm earnings in rural areas despite the importance of these earnings to food security and farm investments this poor distribution implies significant entry barriers and market segmentation it is probable that this will lead over time to an increasingly skewed distribution of land and other assets in rural africa

the relationship between relative prices and the general price level it is very nearly a truismi amaong neoclassical economists that the public is wont to confuse changes in the general price level with relative price changes correspondingl y one might speak of the independence between the two as one of the central postulates of the neoclassical tradition william stanley jevons was aml ong the first to identify this basic dichotomin economic life as well as to attempt to explain the ordinary citizen s seenming incapacity to understand it

explaining micro entrepreneurship in rural vietnam a multilevel analysis in the literature on entrepreneurship there is an ongoing debate about the impact of regional factors on the entrepreneurial process to date most of the empirical work on the influence of regional characteristics on entrepreneurship has focused on developed countries while empirical work that analyses the regional determinants of micro entrepreneurship in rural areas of emerging markets remains scare this paper uses three level binary logistic random intercept models to analyse the effects of explanatory factors at different levels on micro entrepreneurship in rural vietnam our analyses show that identifying the motivation behind starting a micro enterprise is a good way to split entrepreneurship into two groups namely opportunity and necessity driven entrepreneurship which are influenced by very different explanatory factors at different levels we find evidence that in rural areas of emerging markets the individual level dominates with regard to explaining both opportunity and necessity driven entrepreneurship nevertheless the regional level has a significant impact albeit only on opportunity driven entrepreneurship

optimal linear income taxation in models with occupational choice the purpose of this paper is to investigate the implication of occupational choice for linear income taxation occupational choice is restricted to entrepreneurship versus wage earning different settings are considered concerning the introduction of uncertainty and that of individuals heterogeneity in ability or risk aversion for each setting an optimal tax formula is derived and shown to be made up of various components pertaining to insurance redistribution and efficiency

the third sector and the regional development of social capital birch k and whittam g the third sector and the regional development of social capital regional studies there is a growing academic and policy interest in the third sector and its potential impact on regional development a key aspect of the third sector is its role in regional development through the promotion of social capital however there is considerable debate around the definition of the third sector that limits one s understanding of its impact the paper first disentangles a number of ambiguities to clarify the distinctions between the concepts before then exploring the relationship between the regional development of social capital and the various aspects of the third sector finally uk policy agendas and initiatives are considered in light of the earlier discussion birch k et whittam g le secteur tertiaire et le developpement regional du capital social regional studies le monde universitaire et la politique s interessent de plus en plus au secteur tertiaire et a son impact potentiel s

corruption and destructive entrepreneurship the negative effects of corruption at the macro level are well documented corruption reduces economic growth lowers investment and erodes trust in government officials creating an institutional environment that pushes entrepreneurs from productive to destructive activities corruption also has effects at the micro level because some industries are better situated to profit from corruption than others corruption not only lowers economic output but also shifts resources toward some industries and away from others using federal convictions in the usa as a measure of corruption regression results show that increased corruption shifts resources toward the construction industry and away from the education industry and professional scientific and technical service industry the evidence also shows that the distance from state capitals and voter turnout moderate the relationship between corruption and firm concentrations

regional social capital why it matters malecki e j regional social capital why it matters regional studies social capital refers to a culture of interaction among people with productive economic outcomes social capital promotes regional learning both within a region and beyond as it reinforces openness to the ideas of others regional cultures vary in the degree to which people individually and within their organizations trust and interact with one another which is why regional outcomes vary innovation learning and entrepreneurship key processes of regional development take place largely within and among people as members of companies and territorial organizations innovative milieus industrial districts and knowledge economies are among the regions with extraordinary pools of social capital malecki e j

non farm income and inequality in rural pakistan a decomposition analysis this article uses three year panel data to analyse the impact of non farm income on income inequality in rural pakistan after pinpointing the importance of rural non farm income for the poor the article decomposes total rural income among five sources non farm agricultural livestock rental and transfer this decomposition shows that non farm income represents an inequality decreasing source of income the study then decomposes the sources of non farm income this analysis reveals that while non farm unskilled labour income has an equalising effect on income distribution non farm government income has a disequalising effect

local social capital and entrepreneurship we aim to contribute to the analysis of the role that spacebound social capital plays in local regional entrepreneurship we compare social capital with other forms of capital the conclusion is that in the main social capital can be analyzed in the same way as other capital but it has some important special attributes with these attributes as starting point we sketch an outline model of how the spatially defined producer surplus and consumer surplus form a place surplus and of the role played by social capital in the creation of the producer surplus a rereading of schumpeter shows that he was aware of several aspects of what we denominate entrepreneurship inhibiting and facilitating aspects of social capital finally we discuss some formal economic modeling approaches to the theoretical relationship between social capital and entrepreneurship

fractionalization entrepreneurship and the institutional environment for entrepreneurship the vast majority of the literature on ethnicity and entrepreneurship focuses on the construct of ethnic entrepreneurship however very little is known about how ethnic heterogeneity affects entrepreneurship and the institutional arrangements affecting entrepreneurship this study attempts to fill the gap and thus examines the effect of ethnic heterogeneity on various outcomes associated with entrepreneurship and the institutional environment for entrepreneurship using indices of ethnic and linguistic fractionalization we show that ethnic heterogeneity negatively influences entrepreneurship we argue that potential channels that can explain the negative effect of fractionalization on entrepreneurship include trust social network and innovation among others this study provides a new perspective on the existing debate that seeks to understand why the levels of entrepreneurial success vary across countries

panel studies of new venture creation a methods focused review and suggestions for future research longitudinal panel studies of large random samples of business start ups captured at the pre operational stage allow researchers to address core issues for entrepreneurship research namely the processes of creation of new business ventures as well as their antecedents and outcomes here we perform a methods orientated review of all 83 journal articles that have used this type of data set our purpose being to assist users of current data sets as well as designers of new projects in making the best use of this innovative research approach our review reveals a number of methods issues that are largely particular to this type of research we conclude that amidst exemplary contributions much of the reviewed research has not adequately managed these methods challenges nor has it made use of the full potential of this new research approach specifically we identify and suggest remedies for context specific and interrelated methods challenges relating to sample definition choice of level of analysis operationalization and conceptualization use of longitudinal data and dealing with various types of problematic heterogeneity in addition we note that future research can make further strides towards full utilization of the advantages of the research approach through better matching from either direction between theories and the phenomena captured in the data and by addressing some under explored research questions for which the approach may be particularly fruitful

an empirical model of wage indexation provisions in union contracts this paper describes the responses of index linked wage rates to concurrent price increases for a sample of canadian union contracts and then analyzes theseresponses in terms of a simple model of indexation to the aggregate price level the model highlights the importance of aggregate price movements in conveying information about industry specific prices the empirical analysis confirms that industry specific correlations between input and output prices and the consumer price index are important determinants of the flexibility of wages to prices across indexed contracts

determinants of trust in supplier relations evidence from the automotive industry in japan and the united states abstract this study examines the determinants of inter organizational trust by using survey data from over 1000 suppliers in the automotive industry drawing on transaction cost economics game theory and sociological exchange theory we define trust and derive a model of its determinants regression analysis results indicate that determinants of trust are different from determinants of opportunism us japanese differences are found in three respects i the way trust is conceptualised by suppliers is more complex in japan than in the us ii the level of trust is higher in japan than in the us and iii the factors facilitating trust and those attenuating opportunism differ in the us and japan

simple tests of distributional effects on macroeconomic equations the presence of distributional effects in macroeconomic equations is shown to coincide with nonlinearity in micro behavioral relationships parameters estimated with aggregate data as in representative agent models contain distributional biases that are not measurable using aggregate data alone tests for distributional effects and other measures of the extent of aggregation problems are derived using distributional data observed over time significant distributional effects are noted for a model of annual aggregate u s commodity expenditure data a static model that accommodates individual heterogeneity is found to be statistically equivalent to a simply dynamic model that accommodates first order autocorrelation

entrepreneurship and the intergenerational transmission of values there is mounting empirical evidence that there is intergenerational transmission of parental preferences for entrepreneurship however much of the work on this topic is not explicit about the role of values in this transmission process furthermore nearly all studies neglect potential heterogeneity of values among entrepreneurial parents this paper contributes to the literature by making use of a natural experiment that allows 1 identifying a group of entrepreneurial parents who have a distinct priority of challenging existing conditions mastery and 2 detecting whether this value orientation is transmitted comparing german entrepreneurs two decades after reunification reveals that the children of self employed parents who encountered a great deal of resistance in the socialist german democratic republic due to their self employment are much more likely to give mastery as the reason for running their own venture compared to entrepreneurs whose parents did not have to overcome this sort of challenge

agricultural tradables and economic recovery in uganda the limitations of structural adjustment in practice abstract uganda s economic reform program has been widely regarded as a success story for structural adjustment nevertheless a large trade deficit persists shored up by inflows of aid and private remittances the poor performance of the agricultural tradables sector is presented as the key explanation for this trade imbalance two main reasons for this poor performance are found to be the failure to liberalize producer prices quickly and the failure to overcome early institutional resistance to reforms of marketing arrangements uganda s recovery is therefore much less impressive than it appears and the sustainability of the now heavily aid dependent economy must remain in serious doubt

the role of money supply shocks in the short run demand for money abstract previous money demand models are either inconsistent with contemporaneous adjustment of the price level to expected changes in the nominal money supply or imply implausible interest rate fluctuations in response to innovations in nominal money we propose a shock absorber money demand model in which money supply shocks affect the synchronization of asset transactions and so engender a temporary increase or decrease in desired money holdings expected changes do not engender such fluctuations in real money inventories in simultaneous estimates for eight industrial countries the shock absorber model proved empirically superior

measuring enterprises investments in social capital a pilot study westlund h and nilsson e 2005 measuring enterprises investments in social capital a pilot study regional studies 39 1079 1094 research into the impact of social capital on economic growth has focused mainly on the social capital related to the civic society social capital related to business enterprises has received little attention this pilot study aims to develop a method of measuring investment by enterprises in social capital and to study possible connections between the enterprises investments in social capital and their economic growth based on a network approach the paper makes a distinction between the networks links and the norms values etc that are created and sustained by the nodes i e the enterprises and other actors and distributed via the links the study has been limited to measurement of the links three types of link are analysed 1 direct investment in social links 2 investment in economic links forming the basis of social links and 3 investment in social li

money and interest in a cash in advance economy the authors analyze an aggregative general equilibrium model in which the use of money is motivated by a cash in advance constraint applied to purchases of a subset of consumption goods the system is subject to both real and monetary shocks which are economy wide and observed by all they develop methods for verifying the existence of characterizing and explicitly calculating equilibria copyright 1987 by the econometric society

the relevance of standard estimates of rates of return to schooling for education policy a critical assessment abstract this paper examines the accuracy and usefulness of estimated rates of return to schooling based on the standard human capital model of becker and mincer regarding accuracy it investigates whether failure to account for differences in ability and school quality lead to significant biases estimates using ghanaian data confirm this possibility even when accurate estimated rates of return to additional years of schooling may have limited policy implications more useful for governments are rates of return to investments in school quality the paper uses data on cognitive skills to estimate rates of return to three types of school quality improvements

global value chains large scale farming and poverty long term effects in senegal this paper presents panel data evidence on the impact of expansion of global value chains and large scale export oriented farms in developing countries over almost a decade we estimate the income effects of wage employment on large scale farms in the horticultural export sector in senegal using data from two survey rounds covering a seven years period of rapid expansion of the sector we estimate average income effects as well as heterogeneous income effects using fixed effects and quantile fixed effects regressions we find that poverty and inequality reduced much faster in the research area than elsewhere in senegal employment in the horticultural export sector is associated with higher household income and the income effect is strongest for the poorest households expansion of the horticultural export sector in senegal has been particularly pro poor through creating employment that is accessible and creates substantial income gains for the poorest half of the rural population these pro poor employment effects contrast with insights in the literature on increased inequality from rural wage employment

the liquidity services of money this paper investigates the liquidity services provided by cash interest bearing check balances and securities which pay higher interest than checks securities must be traded before con sumers know their desired level or composition of consumption cash a nd checks are more liquid since they are available on demand cas h is more liquid than checks since it is more widely useable as a medium of exchange cash will often be used to buy goods which could be bought by check and the demand for cash will be less sensitive t han the demand for checks to the interest paid on check balances copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

against parsimony three easy ways of complicating some categories of economic discourse economics as a science of human behavior has been grounded in a remarkably parsimonious postulate that of the self interested isolated individual who chooses freely and rationally between alternative courses of action after computing their prospective costs and benefits in recent decades a group of economists has shown considerable industry and ingenuity in applying this way of interpreting the social world to a series of ostensibly noneconomic phenomena from crime to the family and from collective action to democracy the economic or rational actor approach has yielded some important insights but its onward sweep has also revealed some of its intrinsic weaknesses as a result it has become possible to mount a critique which ironically can be carried all the way back to the heartland of the would be conquering discipline that the economic approach presents us with too simpleminded an account of even such fundamental economic processes as consumption and production is the basic thesis of the present paper this abstract was borrowed from another version of this item

nonfarm employment and rural welfare evidence from the himalayas the potential importance of nonfarm employment for the welfare of rural households has long been recognized but whether the nonfarm sector offers prospects for improving the welfare of the rural poor remains a contentious issue we examine distributional and well being effects of nonfarm employment of rural households in the himalayas we account for heterogeneity of nonfarm employment and estimate a system of structural equations to better understand the causal linkages between nonfarm employment and household well being the results confirm that disaggregating nonfarm employment activities matters for understanding the relationship between nonfarm employment and rural welfare while low return nonfarm employment is associated with lower income inequality high return nonfarm activities have a disequalizing effect on the distribution of household incomes we also find that the ability to engage in high return nonfarm activities is associated with higher economic well being poor households on the other hand tend to rely on low return activities that do not contribute to improved well being

small firms social capital and the enhancement of business performance through innovation programmes the paper explores the extent to which social capital is advantageous to small and medium enterprise sme growth social capital is a communal property involving civic engagement associational membership high trust reliability and reciprocity in social networks it is capable of being identified in social political and economic contexts often associated with strong communities however not all strong communities exert the effects of social capital in respect of business activities this paper assesses government programmes to promote collaboration amongst smes for improving innovation capacity by increasing social capital through networking it shows that for a sizeable proportion of programme funded firms in denmark ireland and wales u k social capital building was associated with enhanced business knowledge and innovation performance of particular importance was the opportunity afforded to firms for linkage with external innovation networks and the build up of embeddedness or the institutional basis for the enhancement of social capital as a consequence of discovering the advantages of social capital over a third of respondents planned to continue to develop it in future in many cases funding such activities privately rather than calling on the public purse

hoarding in general equilibrium hoarding of money supply increases can explain long and variable lags from money supply changes to changes in aggregate expenditure and average prices the archibald lipsey model relies upon differences in income elasticities of demand for real money balances to explain aggregate hoarding of money supply changes consequently there is no presumption that average prices and aggregate expenditure will lag behind money supply increases this paper presents a general equilibrium model where money supply increases are partially hoarded in the short run lagged adjustment results from intertemporal substitution rather than income effects and the adjustment of aggregate expenditure and average prices is monotonic copyright 1990 by the london school of economics and political science

interest rates in a credit constrained economy when households face credit constraints in an economy with inside as well as outside money stationary equilibrium real interest rates are below the household rate of time preference they also depend significantly upon household risk aversion the demand for inside versus outside money bank costs bank reserves inflation and the marginal productivity of capital and capital depreciation rates in addition changes in financial variables affect per capita capital and output to a greater extent when households are credit constrained copyright 1994 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

non farm income gender and inequality evidence from rural ghana and uganda abstract this paper examines how the distribution of earnings in rural ghana and uganda differs by income type and by gender we find that non farm earnings contribute to rising inequality but that lower income groups also benefit due to strong overall growth in non farm earnings the inequality inducing effect is driven by self employment income wage income on the other hand reduces inequality the tendency of non farm income to contribute to inequality is greater among female headed households for whom self employment is important and non farm opportunities more constrained determinants of non farm income are estimated and appear to be strongly related to location education age and distance to market estimates of the linkages to agriculture in ghana are weaker than expected showing the non farm sector to be functioning more as an alternative activity to agriculture than as a complement