Small Business Economics

, Volume 33, Issue 3, pp 293–302 | Cite as

Union power, entrepreneurial risk, and entrepreneurship

  • Vesa Kanniainen
  • Mikko Leppämäki


The paper proposes that a trade-off can be identified between the union power and the entry rate of new enterprises. It suggests that union power increases the entrepreneurial failure risk, thereby discouraging entrepreneurship and reducing the employment opportunities. In addition, we show that high price uncertainty and a union-controlled labour market is a harmful combination for entrepreneurship.


Entrepreneurial risk Union power Entrepreneurship Occupational choice 

JEL Classifications

J23 J24 J51 L26 M13 



We are grateful to Mikko Mustoner and two anonymous referees for helpful comments and suggestions.


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Copyright information

© Springer Science+Business Media, LLC. 2008

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of Helsinki and CESifoHelsinkiFinland
  2. 2.Helsinki School of Economics, Graduate School of Finance and GSFHelsinkiFinland

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