How sensitive is the business ownership rate to unemployment fluctuations? Evidence of asymmetries in a panel of 23 OECD countries

  1. Carmona Arango, Mónica
  2. Congregado Ramírez de Aguilera, Emilio
  3. Golpe Moya, Antonio Aníbal
Book:
Descubriendo nuevos horizontes en administracion: XXVII Congreso Anual AEDEM, Universidad de Huelva, 5, 6 y 7 de junio de 2013
  1. García Machado, Juan José (coord.)

Publisher: Escuela Superior de Gestión Comercial y Marketing, ESIC

ISBN: 978-84-7356-914-9

Year of publication: 2013

Congress: Asociación Europea de Dirección y Economía de Empresa. Congreso Nacional (27. 2013. Islantilla)

Type: Conference paper

Abstract

The aim of this article is to identify whether the relationship running from unemployment to entrepreneurship/self-employment �the so-called 'recession-push' hypothesis- is affected asymmetrically by the labor market dynamics conditions. To this end we employ a panel threshold regression model, proposed by Hansen (1999), in which nonlinearities are introduced by allowing exogenous variable to have a different impact on the endogenous variable depending on the regime. In particular, our estimates provide support to the existence of different responses of cyclical self-employment to cyclical unemployment, depending on the value of the deviation between the observed and natural rate of unemployment one period lagged �i.e. depending on the intensity of the unemployment problem-, which is the threshold variable.