Self‐employment and New Firm Formation

Much academic interest in the process of new firm formation has centered on the influence of so-called "push" and "pull" factors on formation activity, emphasizing their effect on the incentives for workers to enter self-employment. This paper investigates whether the stock of self-employed individuals can contribute independent evidence towards an explanation of the level of company incorporations in Great Britain. In doing so, it highlights the role which capital barriers may play in limiting entry into entrepreneurial activity.