The More Business Owners the Merrier? The Role of Tertiary Education

André van Stel and Mirjam Praag

No H201010, Scales Research Reports from EIM Business and Policy Research

Abstract: Policy in developed countries is often based on the assumption that higher business ownership rates induce economic value. However, not everyone can be a business owner and many labour market participants would contribute more to economic value creation as an employee than a business owner. The implied existence of an ‘optimal’ business ownership rate would thus replace the dictum of ‘the more business owners, the merrier’. We attempt to establish whether there is such an optimal level, while investigating the role of tertiary education. Two findings stand out. First, by estimating extended versions of traditional Cobb Douglas production functions on a sample of 19 OECD countries over the period 1981-2006, we find indeed robust evidence of an optimal business ownership rate. Second, the optimal business ownership rate tends to decrease with participation rates in tertiary education.

Pages: 41 pages
Date: 2011-12-12
New Economics Papers: this item is included in nep-bec and nep-ent
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: The more business owners, the merrier? The role of tertiary education (2013)
Working Paper: The More Business Owners the Merrier? The Role of Tertiary Education (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eim:papers:h201010

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