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Entrepreneurship in India : the question of occupational transition

Monsen, Erik and Mahagaonkar, Prashanth and Dienes, Christian (2012) Entrepreneurship in India : the question of occupational transition. Small Business Economics, 39 (2). 359–382. ISSN 0921-898X

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Occupational transition from salaried to self-employment status is important in developed economies, but is even more critical in emerging economies, as individuals’ occupational choices can drive economic development. Using data on 3,295 individuals from 23 administrative regions in India, we examine the effect of regional and geographic factors on actual and intended transition. We find that regional self-employment and unemployment rates are associated with a lower likelihood of past and future transitions, but that regional gross domestic product (GDP) per capita is only relevant for actual transitions. Further, urban/rural location moderates the effects of income ratios and regional GDP per capita. While we observe similarities between India and developed economies, there are intriguing differences, and new insights are identified.