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Start-up success of freelancers New microeconometric evidence from the German Socio-Economic Panel

Merz, Joachim and Paic, Peter (2006): Start-up success of freelancers New microeconometric evidence from the German Socio-Economic Panel.

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Abstract

If certain start-up characteristics will indicate a business success, knowing such characteristics could generate more successful start-ups and more efficient start-up counseling. Our study will contribut e to this by quantifying individual success determinants of freelance start-ups. The data base for the microeconometric analyses of the survival of the first three years is a revised German Socio-Economic Panel (SOEP) for 1992 until 2002, which allows to incorporate institutional, personal and family/household socio-economic variables. We describe and discuss the datawork to achieve compatible information over time within a revised GSOEP and present microeconometric rare events logit, logit and probit results. The start-up success measured as the probability to survive the first three years is first of all influenced by an active labour force participation with its acquired skills and working experiences just before the start-up period (rank 1), followed by a non-university degree as the highest general human capital indicator (rank 2), a general (non-linear) experience indicated by age (rank 3) and the business related background (rank 4) as the type of liberal profession in the group of the liberal medical professions and the liberal technical and scientific professions.

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