Mónica Carmona

Self-Employment and Business Cycles

The relationship between self-employment and some macroeconomic variables is and has been at the heart of the debate about self-employment contributions to employment and economic growth. This paper is devoted to the exploration of the co-movement and causality between entrepreneurship and economic performance in both directions. It looks for basic relationships between self-employment and some macroeconomic variables in Spain and the US, using quarterly data from 1987:2 to 2004:4. Our results do not support the procyclicality of self-employment in general, but we found strong evidence on procyclicality for a specific group of self-employed: self-employed with employees (employers) in Spain. On the other hand causality tests suggest that the business cycle (GDP or unemployment) causes to employers and provides evidence on instantaneous causality between self-employment/own-account workers and GDP, in Spain. For the US we found weak correlations between self-employment and the business cycle (they tend to become larger when the forecast horizon increases).

Comovement Between Self-Employment and Macroeconomic Variables

The relationship between self-employment and certain macroeconomic variables is often at the heart of the debate about the contributions of self-employment to employment and economic growth; examining this relationship is the aim of this article. This article is devoted to the empirical exploration of the comovement and causality between entrepreneurship and economic performance in both directions. This study searches for basic relationships between self-employment and certain macroeconomic variables in Spain using quarterly data from 1980:1 to 2009:4. From this analysis, four key findings emerge: (a) the relation between self-employment and the business cycle differs across two components of self-employment, that is, employers and own-account workers; (b) the existence of a strong bidirectional causality between self-employment and unemployment and GDP; (c) business cycles contain information valuable for predicting today’s employers; and (d) entrepreneurship promotion policies oriented to encourage the emergence of new job creators may be a cornerstone of a new strategy to combat unemployment. These results should be kept in mind when designing entrepreneurship policies.

Self-employment and business cycles: searching for asymmetries in a panel of 23 OECD countries

The aim of this work is to identify whether the bidirectional relationship between entrepreneurship cycles and output gaps is asymmetric depending on the phase of the business cycle. To this end, we employ a panel threshold regression model in which different relations can prevail in each regime, defined by the values of the threshold variable. The findings of this article qualify previous empirical results. In particular, our estimates provide support for the existence of different responses – both in terms of sign and magnitude – of cyclical self-employment to output growth and of output growth to cyclical self-employment, depending on the value of the threshold variable. The result is highly important for policy makers and practitioners given that whether they ignore the asymmetric impact that an entrepreneurship promotion policy action might have on the real economy, the action might lead to unexpected effects.

Comovement Between Self-Employment and Macroeconomic Variables: Evidence From Spain

The relationship between self-employment and certain macroeconomic variables is often at the heart of the debate about the contributions of self-employment to employment and economic growth; examining this relationship is the aim of this article. This article is devoted to the empirical exploration of the comovement and causality between entrepreneurship and economic performance in both directions. This study searches for basic relationships between self-employment and certain macroeconomic variables in Spain using quarterly data from 1980:1 to 2009:4. From this analysis, four key findings emerge: (a) the relation between self-employment and the business cycle differs across two components of self-employment, that is, employers and own-account workers; (b) the existence of a strong bidirectional causality between self-employment and unemployment and GDP; (c) business cycles contain information valuable for predicting today’s employers; and (d) entrepreneurship promotion policies oriented to encourage the emergence of new job creators may be a cornerstone of a new strategy to combat unemployment. These results should be kept in mind when designing entrepreneurship policies.

Financial System and Entrepreneurship: Institutions and Agents

The availability or ability to access the capital necessary to start an entrepreneurial project has become one of the more deeply explored elements in the empirical research, as it is considered one of the factors that more frequently constitute an obstacle to the decision of becoming an entrepreneur. This chapter tries to contribute to the measurement of the level in which the financial system and the institutions that regulate them favours or hinders the access to the entrepreneurial function, going over the institutions and mechanisms through which the financial system has an influence.