The emergence of new entrepreneurs in Europe

Abstract

This work tries to shed some light on the decision of becoming self-employed with and without employees, distinguishing between paid-employment and unemployment as starting status and exploring if the exposure to foreign competition also influences this decision. In doing so, we apply binary and multinomial logit models to data drawn from the European Community Household Panel for the EU-15 (ECHP, 1994–2001). Thus, we provide some evidence supporting the existence of different factors affecting each considered transition in terms of intensity of the causal relationship. Finally our study also suggests the existence of a negative relationship between the degree of openness and the probability of become entrepreneur, across the EU-15 countries, as some theoretical models suggest.