Entrepreneurship, Economic Growth and Public Policy

This paper is an introduction to the second Global Entrepreneurship Research Conference. The conference focused on developing a better understanding of the relationships among entrepreneurship, economic growth and public policy, and variations according to the stage of economic development. The papers in this special issue conduct analysis with GEM micro-and-macro data, and offer several important policy recommendations. First, middle-income countries should focus on increasing human capital, upgrading technology availability and promoting enterprise development. It is important to start enterprise development policies early because the main drivers are perceptual variables that are difficult to change in the short run. Second, for developed economies, reducing entry regulations, in most cases, will not result in more high-potential startups. Both labor market reform and deregulation of financial markets may be needed to support growth of high-performance ventures.      

Sickness Absence and Works Councils: Evidence from German Individual and Linked Employer–Employee Data

Using both household and linked employer–employee data for Germany, we assess the effects of nonunion representation in the form of works councils on (1) individual sickness absence rates and (2) a subjective measure of personnel problems due to sickness absence as perceived by a firm's management. We find that the existence of a works council is positively correlated with the incidence and the annual duration of absence. Further, personnel problems due to absence are more likely to occur in plants with a works council.     

Corporate social responsibility and tax avoidance

We theoretically analyse the relationship between corporate social responsibility (CSR) and tax avoidance of an oligopolistic firm. The firm maximizes a weighted sum of profits and a CSR objective that depends on output and the firm's contribution to public good provision, that is, tax payments. Making one CSR element more important induces the firm to adhere less to the other and to reduce tax avoidance. Hence, simultaneously a substitutive and a complementary relationship between CSR and tax avoidance can be observed. Therefore, using composite indicators of CSR prevents an empirical identification of this linkage. Moreover, if tax avoidance declines, CSR activities will increase. Consequently, the overall link between CSR and tax avoidance is theoretically ambiguous.     

Tax evasion in a Cournot oligopoly with endogenous entry

If an additional competitor reduces output per firm in a homogenous Cournot oligopoly, market entry will be excessive. Taxes can correct the so-called business stealing externality. We investigate how evading a tax on operating profits affects the excessive entry prediction. Tax evasion raises the number of firms in market equilibrium and can alter their welfare-maximising number. In consequence, evasion can aggravate or mitigate excessive entry. Which of these outcomes prevails is determined by the direct welfare consequences of tax evasion and the relationship between evasion and the tax base. We also determine conditions which imply that overall welfare declines with tax evasion.     

Family employees and absenteeism

Work effort varies greatly across employees, as evidenced by substantial differences in absence rates. Moreover, absenteeism causes sizeable output losses. Using data from the European Community Household Panel (ECHP), this paper investigates absence behaviour of family employees, i.e. workers who are employed in enterprises owned by a relative. Our estimates indicate that being a family employee instead of a regular employee in the private sector significantly reduces both the probability and duration of absence to a substantial degree.     

Drivers of Trust: Some Experiences from Hungarian Agricultural Cooperatives

This article examines the drivers of trust in the machinery-sharing cooperation arrangements of Hungarian field crops farms. Our research has focused on the role of 2 factors on the basis of the widely referred trust model: faith in loyalty and capability. The empirical results clearly confirm the hypothesis of the theoretical model, namely, partners will trust each other if their faith is high both in loyalty and in competence. Our research has also pointed out that the level of trust between partners is determined differently by the 2 examined factors: it is statistically proven that the impact of faith in loyalty is higher.     

Human evolution in the Third Millennium

We live at a critical juncture in the history of our species, when a mode of evolution that was dominant since the advance of the Neolithic creates unsustainable conditions. The hitherto dominant mode can be characterized as aiming at conquest, colonization and, more recently, consumption: it is the ‘extensive’ form of evolution. By contrast the currently desirable, and in the long-term uniquely sustainable mode of evolution is the intensive form: it aims at connection, communication, and consciousness. The values, worldviews, and ethics of intensive evolution can be already perceived and need to be further developed; they are the key to a future that is both sustainable and humane.