Darja Reuschke

Housing Assets and Small Business Investment: Exploring Links for Theory and Policy

Reuschke D. and Maclennan D. Housing assets and small business investment: exploring links for theory and policy, Regional Studies. Housing market activity and firm formation are both positively correlated with the business cycle, and the levels of mortgage lending to business owners and funding of small firms have fallen in the UK since 2008. This paper explores a neglected, causal linkage between housing assets and small business investment and the economy and, in particular, draws attention to the recent reduction in small business investment consequent to a reduced capacity of entrepreneurs to withdraw or leverage housing equity. It draws on secondary data for the UK and interviews with key policy and practice stakeholders for both housing and enterprise.

Testing the 'Residential Rootedness'-Hypothesis of Self-Employment for Germany and the UK

Based on the notion that entrepreneurship is a ‘local event’, the literature argues that entrepreneurs are ‘rooted’ in place. This paper tests the ‘residential rootedness’ hypothesis of self-employment by examining for Germany and the UK whether the self-employed are less likely to move over long distances (internal migration) than workers in paid employment. Using longitudinal data from the German Socio-Economic Panel Study (SOEP) and the British Household Panel Survey (BHPS), and accounting for transitions in employment status we found little evidence that the self-employed in Germany and the UK are more rooted in place than workers in paid employment. Generally speaking, the self-employed were no less likely than workers in paid employment to migrate over longer distance. In contrast to the residential rootedness hypothesis we found that entry into self-employment and female self-employment are associated with internal migration, and that the self-employed who work from home (home-based businesses) are fairly geographically mobile. The gendered results suggest that women might use self-employment as a strategy to be spatially mobile with their household, or as a strategy to stay in the workforce after having moved residence until they find a job in the more secure wage and salary sector.

Self-Employment as a Route In and Out of Britain's South East

Reuschke D. Self-employment as a route in and out of Britains South East, Regional Studies. Based on A. J. Fieldings Escalator Region Model (ERM) on South East England, this paper examines whether the South East exports its ‘entrepreneurial culture’ and gains entrepreneurial resources through internal migration using the British Household Panel Survey (BHPS) 1991–2008. Results show that, consistent with the ERM, the region loses entrepreneurs. However, importantly, out-migrants from the South East are more likely to exit subsequently from self-employment relative to other UK internal migrants. Despite its economic functions, the South East is no more likely to attract (would-be) self-employed entrepreneurs than other regions. This calls into question to what extent the South East acts as an ‘escalator’ in terms of self-employment.

Entrepreneurship in Cities

Entrepreneurship in Cities focuses on the neglected role of the home and the residential neighbourhood context for entrepreneurship and businesses within cities. The overall objective of the book is to develop a new interdisciplinary perspective that links entrepreneurship research with neighbourhood and urban studies. A key contribution is to show that entrepreneurship in cities is more than agglomeration economies and high-tech clusters. This is the first book to connect entrepreneurship with neighbourhoods and homes, recognising that business activity in the city is not confined to central business districts, high streets and industrial estates but is also found in residential neighbourhoods. It highlights the importance of home-based businesses for the economy of cities. These often overlooked types of businesses and workers significantly contribute to the ‘buzz’ that makes cities favourable places to live and work.

City economies and microbusiness growth

In developed countries, microbusinesses (those employing fewer than 10 people) and home-based businesses have been systematically overlooked in urban economic development thinking. This article assesses the influence of city location and being run from the business owner’s home on microbusiness growth, based on empirical analysis of panel firm-level data over a four-year period during the UK’s long boom. The analysis reveals that cities provide benefits to microbusinesses for turnover growth but not for employment growth – suggesting that the additional growth induced by cities for microbusinesses may be jobless growth. However, in the case of microbusinesses run from the owner’s home, cities facilitate growth into medium-sized businesses (with 50+ staff). In conclusion, microbusinesses, including those run from business owners’ homes, are integral to the evolution and dynamics of urban economies and essential to understanding the nature of growth in cities. Agglomeration theory needs to say more about how urban agglomeration benefits firms of different types and sizes, and small business and self-employment research needs to say more about the influence of location, in particular cities. How businesses use both commercial and residential property are integral to the nature of growth in cities.

The importance of housing and neighbourhood resources for urban microbusinesses

ABSTRACT Economic research has rarely considered the significance of the home and neighbourhood context of where business owners live for their business. Conversely, urban and neighbourhood research has overlooked how housing and neighbourhood shape business and entrepreneurship outcomes. This paper investigates the importance of housing and neighbourhood resources for microbusinesses using a random sample of microbusinesses in Edinburgh (UK) including those that are informal and home-based, and various characteristics of the neighbourhood in which the business owner lives were attached to the survey records. The data capture whether business owners have business premises outside their homes, and have used neighbourhood contacts, housing equity or space in the house for their business. In short, housing and neighbourhood resources are used by a large majority (82%) of microbusinesses. The findings challenge a number of common assumptions on the separation of commercial and residential functions, how neighbourhoods feature in the evolution of businesses, the nested conceptualization of home within a neighbourhood and on the nature of home-based businesses. It is concluded that multi-use (rather than mixed-use) neighbourhood planning would help foster more flexible and dynamic use of neighbourhoods and urban districts, although recognizing that this is a political issue.

The Importance of Housing for Self-employment

Abstract This article demonstrates that housing influences decisions to start businesses or become self-employed. Housing characteristics can facilitate or hinder business start-ups, and the mechanisms depend on whether the business start-up takes place in people’s homes or not. Hitherto, economic geography has largely viewed housing as a system that accommodates and filters the workforce across space and neglected that housing is an economic resource to individuals. Using longitudinal microdata for the United Kingdom and a sample that accounts for the endogeneity of housing to employment/entrepreneurship, the study finds that home-based self-employment is facilitated by housing wealth, outright ownership, detached houses, and large dwellings and is undermined by living in flats. Private rented accommodation enables entries into self-employment that are not based in people’s homes. Housing thus provides financial security and space, on the one hand, and shapes flexibility needed for entrepreneurship, on the other hand. Areas for future research arising from this study relate to the role of housing over the individual entrepreneur’s life course and area effects on entrepreneurship and self-employment that relate to the spatial variation of housing supply.

Integrating entrepreneurship with urban and neighbourhood studies: lessons for future research

The seminar series ‘Entrepreneurship in Homes and Neighbourhoods’ this volume draws on is funded by the ESRC grant ES/L001489/1 to Darja Reuschke, Colin Mason, Stephen Syrett, Maarten van Ham and Duncan Maclennan.

Connecting entrepreneurship with neighbourhoods and homes

How to promote entrepreneurship and firm formation has been a major research and policy question for some time, and especially since the global financial crisis of 2007–2009. There has been a growing recognition of agglomerations as key to supporting economic growth and the importance of cities in growth processes (Fujita et al. 1999; Glaeser and Gottlieb 2009). However, at both theoretical and policy levels there has been a disjuncture between perspectives on how people work, start up businesses and innovate and how they live and house themselves (Reuschke and Maclennan 2014). Across entrepreneurship studies there is a range of work that has been concerned with the embedded nature of the entrepreneur, most notably in relation to ethnic minority business, women and family business. Family business in particular has an extensive and well-established literature (Cromie et al. 1999; Anderson et al. 2005). The family firm literature has argued that business and household are two institutions that are inextricably connected. Entrepreneurship studies that are concerned with these ‘blurred boundaries’ between the business and the household have looked at business and household decisions in relation to business strategies, notably how household characteristics and strategy influence the development of new business and business growth (Alsos et al. 2014). While this literature has contributed to understanding business practices and the role of the family in business, the interface of the (family) firm with the home has largely been excluded. An emerging literature on home-based businesses points to the significance of the home for entrepreneurship. In fact, the oldest (family) firms in the world are home-based, such as Hoshi Ryokan founded in AD 718 in Komatsu, Japan (Dodd Drakopoulou et al.

The Economies of Urban Diversity: An Introduction

As European Capitals of Culture in 2010 and metropolitan areas of immigration and transmigration, both Istanbul and the Ruhr Area (Essen was designated as European Capital of Culture on behalf of the Ruhr Area) share a complex cultural and social history. Strong human, political, and economic ties have long linked the European Capital of Culture of Turkey to Germany’s main immigration region, which is about to become a new cultural center thanks to the recognition of its industrial heritage by UNESCO (Zeche Zollverein in Essen).1 Even though the cultural history of each region is different, a crisscross reading of ‘parallel lives’ between the two countries helps to understand better the use and the potential of urban diversity over time.