Self-employment, internal migration and place embeddedness

Little is known about the individual location behaviour of self-employed entrepreneurs. Population geography has not researched this issue and entrepreneurship literature has given it little attention. This paper examines whether self-employed entrepreneurs are 'rooted' in place and also whether those who are more rooted in place are more likely to enter self-employment, thereby shedding new light onto the place embeddedness of self-employment. Drawing on data from the German Socio-Economic Panel Study (SOEP) 1996-2009 it shows that self-employed entrepreneurs as compared with employees are not more rooted in place and that those who are more rooted in place are not more likely to become self-employed. In contrast to expectations drawn from previous literature, flows into self-employment are positively associated with inter-regional moves. The only finding that supports the assumption of 'place inertia' of entrepreneurship is that starting a business is less likely to be linked with internal migration than job changes in the wage and salary sector. It concludes that mobility and immobility and individual and household constraints and preferences are important for understanding those who become self-employed. At the same time, the people-place relations of self-employment are important to understand migration and the functioning of labour markets. More generally, this paper underpins the importance of demographic phenomena for economic outcomes and thus the need for population geography to engage with other disciplines, in this case economic geography and entrepreneurship research.