The Determinants of New Firm Formation in UK Construction: Evidence from Quarterly VAT Registrations

This paper examines the ways in which industry-specific and macro-economic factors combine to lead to variations over time in the rate of new firm formation in the UK construction industry. The paper corroborates findings from elsewhere which suggest that housing wealth may be an important source of collateral for individuals seeking to raise the finance necessary to start up in business. The analysis of industry-specific influences supports the hypothesis that formation activity in construction is responsive to variations in the relative returns to entrepreneurship