Learning about Comparative Advantage in Entrepreneurship: Evidence from Thailand Anant Nyshadham UniversityofSouthernCalifornia October 5, 2012 1 Motivation (cid:73) Non-agricultural household enterprise is an important part of economic livelihood in developing countries (cid:73) Entrepreneurshipproposedasimportantdriverof growth(e.g. Foster&Rosenzweig(2004)) (cid:73) Policyandpublicresourcesfocusedonencouraging entrepreneurshipandimprovingbusinessprospects (microfinance,training,consulting,etc.) (cid:73) TownsendThaiData:over40%ofhouseholdsowna non-agriculturalenterpriseeachyear 2 Motivation (cid:73) Non-agricultural household enterprise is an important part of economic livelihood in developing countries (cid:73) Entrepreneurshipproposedasimportantdriverof growth(e.g. Foster&Rosenzweig(2004)) (cid:73) Policyandpublicresourcesfocusedonencouraging entrepreneurshipandimprovingbusinessprospects (microfinance,training,consulting,etc.) (cid:73) TownsendThaiData:over40%ofhouseholdsowna non-agriculturalenterpriseeachyear 2 Motivation (cid:73) Non-agricultural household enterprise is an important part of economic livelihood in developing countries (cid:73) Entrepreneurshipproposedasimportantdriverof growth(e.g. Foster&Rosenzweig(2004)) (cid:73) Policyandpublicresourcesfocusedonencouraging entrepreneurshipandimprovingbusinessprospects (microfinance,training,consulting,etc.) (cid:73) TownsendThaiData:over40%ofhouseholdsowna non-agriculturalenterpriseeachyear 2 Motivation (cid:73) Non-agricultural household enterprise is an important part of economic livelihood in developing countries (cid:73) Entrepreneurshipproposedasimportantdriverof growth(e.g. Foster&Rosenzweig(2004)) (cid:73) Policyandpublicresourcesfocusedonencouraging entrepreneurshipandimprovingbusinessprospects (microfinance,training,consulting,etc.) (cid:73) TownsendThaiData:over40%ofhouseholdsowna non-agriculturalenterpriseeachyear 2 Motivation (cid:73) Few household businesses grow to represent primary income source or employ non-household members (cid:73) roughly1/4ofenterprisehouseholdsgenerateatleast 50%ofhouseholdincomefrombusiness (cid:73) roughly11%ofenterprisehouseholdshadpaid employees (cid:73) Why do a fraction succeed and grow? Why do seemingly unsuccessful enterprises persist? (cid:73) SPOILERALERT:Somehouseholdsrelativelybadat enterprise;won’tdoitinthelong-run,butparticipate intermittentlyastheyfigurethisout 3 Motivation (cid:73) Few household businesses grow to represent primary income source or employ non-household members (cid:73) roughly1/4ofenterprisehouseholdsgenerateatleast 50%ofhouseholdincomefrombusiness (cid:73) roughly11%ofenterprisehouseholdshadpaid employees (cid:73) Why do a fraction succeed and grow? Why do seemingly unsuccessful enterprises persist? (cid:73) SPOILERALERT:Somehouseholdsrelativelybadat enterprise;won’tdoitinthelong-run,butparticipate intermittentlyastheyfigurethisout 3 Motivation (cid:73) Few household businesses grow to represent primary income source or employ non-household members (cid:73) roughly1/4ofenterprisehouseholdsgenerateatleast 50%ofhouseholdincomefrombusiness (cid:73) roughly11%ofenterprisehouseholdshadpaid employees (cid:73) Why do a fraction succeed and grow? Why do seemingly unsuccessful enterprises persist? (cid:73) SPOILERALERT:Somehouseholdsrelativelybadat enterprise;won’tdoitinthelong-run,butparticipate intermittentlyastheyfigurethisout 3 Motivation (cid:73) Few household businesses grow to represent primary income source or employ non-household members (cid:73) roughly1/4ofenterprisehouseholdsgenerateatleast 50%ofhouseholdincomefrombusiness (cid:73) roughly11%ofenterprisehouseholdshadpaid employees (cid:73) Why do a fraction succeed and grow? Why do seemingly unsuccessful enterprises persist? (cid:73) SPOILERALERT:Somehouseholdsrelativelybadat enterprise;won’tdoitinthelong-run,butparticipate intermittentlyastheyfigurethisout 3 Motivation (cid:73) Few household businesses grow to represent primary income source or employ non-household members (cid:73) roughly1/4ofenterprisehouseholdsgenerateatleast 50%ofhouseholdincomefrombusiness (cid:73) roughly11%ofenterprisehouseholdshadpaid employees (cid:73) Why do a fraction succeed and grow? Why do seemingly unsuccessful enterprises persist? (cid:73) SPOILERALERT:Somehouseholdsrelativelybadat enterprise;won’tdoitinthelong-run,butparticipate intermittentlyastheyfigurethisout 3