Essays on entrepreneurship in singapore

ESSAYS ON ENTREPRENEURSHIP IN SINGAPORE LUM WEI HSIUNG ALEX NATIONAL UNIVERSITY OF SINGAPORE 2005 ESSAYS ON ENTREPRENEURSHIP IN SINGAPORE LUM WEI HSIUNG ALEX (MPHIL, ECONOMICS, UNIVERSITY OF CAMBRIDGE) A THESIS SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY DEPARTMENT OF ECONOMICS NATIONAL UNIVERSITY OF SINGAPORE 2005 Acknowledgements This thesis would not have been possible if not for my Lord Jesus Christ who has sustained me throughout my life and guided me as I wrote my thesis. My sincere gratitude also to my thesis committee – my main supervisor, Associate Professor Hoon Hian Teck, my co-supervisor, Professor Parkash Chander and my thesis advisor, Dr Liu Haoming. I would also like to acknowledge Dr Wong Yan Loi, from the Mathematics Department, for his advice on the mathematical software, Maple 10. My thanks also to the respondents who participated in my survey work for the first chapter of my thesis. Their feedback and comments have been invaluable in forming the ideas behind my thesis. My parents, who have endured an ‘unemployed’ son for the past years and months, were instrumental to my thesis with their support and understanding and always ensuring that I had the best food to eat. My appreciation also to my sister, Audrey, and brother-inlaw, Petros, who are always very encouraging. And to my year-old nephew, Joshua, who is helpful in reminding me to have a sense of achievement even in the small things. Last but certainly not least, my love to my wife, Janine, who has overwhelmed me with her love, affection and support. . i Table of Contents Summary iii List of Tables v List of Figures vi Preface Chapter One: Perception of Government-Linked Companies And Entrepreneurship in Singapore Chapter Two: Loss Carry-Back Tax Scheme and Entrepreneurship 36 Chapter Three: Education, Knowledge Transfer and Entrepreneurship 60 Final Remarks 85 Bibliography 87 Appendix I: Survey Form 95 Appendix II: Maple Worksheets 101 Appendix III: The MNC’s Optimization Problem 105 ii Summary Singapore’s economy has undoubtedly benefited significantly from entrepreneurship and various initiatives by the Singapore Government have been developed to encourage and nurture entrepreneurial activity. There are several peculiar characteristics of entrepreneurship in Singapore and this thesis takes into account three of them – namely, the presence of Government-Linked Companies (GLCs), the loss carry-back tax scheme announced in Singapore Budget 2005 and the influence of Multi-National Corporations. This thesis comprises three chapters. The first chapter captures the perceptions of GLCs on Singaporeans’ occupational choice and finds that a large proportion of Singaporeans believe that GLCs receive financial rescue from the Government if they fail. Similarly, a majority also believes that GLCs reduce entrepreneurs’ profit and that GLCs have an advantage in obtaining credit. However, probit regression analysis establishes that the perceptions not have a statistically significant effect on Singaporeans’ decision to become entrepreneurs. Instead, the main determinants are the number of years of formal education, the number of dependants, and most significantly, the inclination of Singaporeans towards risk-taking. Since individuals’ aversion towards risk is noted to be one of the most important factors influencing occupational choice, the second chapter of this thesis considers a socially optimal tax and subsidy scheme analogous to the loss carry-back scheme announced in Singapore Budget 2005. The scheme is self-financed by taxes on salaried wage and entrepreneurial profit and provides a subsidy for entrepreneurs who encounter a ‘bad iii state’, thereby narrowing the risk spread that the entrepreneur faces. We find that such a scheme serves to induce agents who are more risk-averse towards entrepreneurship, thereby increasing the proportion of entrepreneurs to salaried workers. Numerical analysis of the tax and subsidy scheme also finds that a higher level of entrepreneurial profit is associated with a higher optimal tax rate and with a greater proportion of entrepreneurs to salaried workers. The third chapter examines the relationship between an individual’s allocation of time towards education, once he has decided on his preferred occupation, and a MNC’s decision to transfer knowledge. We find that only entrepreneur-type individuals take into account the rate of knowledge transfer by the MNCs, who in turn provide a positive rate of knowledge transfer to entrepreneur-type individuals. iv List of Tables Table 1.1: Occupation Profile of Survey Respondents 16 Table 1.2: Age Profile of Survey Respondents 16 Table 1.3: Perceptions of Survey Respondents 17 Table 1.4: Perceptions of Entrepreneurs and Non-entrepreneurs 17 Table 1.5: Summary of Statistics 25 Table 1.6: Initial Probit Model Results 26 Table 1.7: Subsequent Probit Results to Test for Correlation 27 Table 1.8 – Probit Regression Results With Only One Perception Included 28 Table 2.1: Numerical Results from Maple 10 55 v List of Figures Figure 2.1: Proportion of Entrepreneurs to Salaried Workers Before and After Tax and Subsidy Scheme 52 Figure 3.1: Sequential Decision-making Process of the Individual and the MNC 69 vi Preface From the days of Adam Smith and Jean Baptisté Say to this current century, many economists have been intrigued by the impact of entrepreneurship on economic growth. Schumpeter (1934) portrayed the entrepreneur as an innovator who was able to employ current resources in new and effective combinations thereby inducing imitation, formation of new industries and increasing economic activity. Knight (1942) further described entrepreneurship as a “dynamic activity”, which induces improvement in the economic eco-system. Grossman and Helpman (1994) too noted that the profit-seeking behaviour underlying entrepreneurship is a necessary condition for economic growth as it provides the impetus for the country to attain a higher plane of economic development through technological progress. Singapore’s economy has undoubtedly benefited significantly from entrepreneurship as domestic Small and Medium Enterprises (SMEs) constitute 92% of all businesses in Singapore and contribute to 51% of total employment in Singapore. Entrepreneurship is thus seen as a way of raising employment as the number of SMEs increase as well as the number of self-employed who may have lost their jobs in the private sector during the recessions1. Therefore, various initiatives by the Singapore Government like the Economic Review Committee (ERC) have been developed to encourage and nurture entrepreneurial activity. Some of the measures brought about by the ERC include tax incentives, reduced bureaucracy and fair competition laws. Other pro-entrepreneurship policies and financing The development of SMEs to alleviate unemployment is also the motivation behind the International Labour Organization’s Small Enterprise Development (SEED) schemes in Singapore to assist entrepreneurs in setting up their businesses include the Local Enterprise Finance Scheme (LEFS). A recent pro-entrepreneurship initiative in Singapore launched in March 2005 is a SME credit rating system which enables financial institutions to evaluate the creditworthiness of entrepreneurs. There are several unique characteristics of entrepreneurship in Singapore and this thesis takes into account three that have the most significant impact on entrepreneurship, namely, the presence of Government-Linked Companies (GLCs), the loss carry-back scheme announced in Singapore Budget 2005 and the influence of Multi-National Corporations. The aim of this thesis is to provide a systematic approach to analysing entrepreneurship in Singapore by considering each of these issues. We begin by examining the factors affecting the occupational choice of Singaporeans towards entrepreneurship and specifically look at the effect of Singaporeans’ perceptions of Government-Linked Companies (GLCs). We discover that although many Singaporeans have the perception that GLCs receive financial aid from the Government even if they are loss-making and that they receive favourable credit terms, these perceptions not have a statistically significant effect on occupational choice. Instead, the main determinants are number of years of formal education, number of dependants and inclination of Singaporeans towards risk-taking. We proceed to analyse a scheme that takes into account Singaporeans’ risk aversion with the aim of encouraging more individuals to choose entrepreneurship. In particular, we model a socially optimal tax and subsidy scheme, analogous to the loss carry-back scheme Grossmann, V. (2004). How to promote R&D-based growth? Public education expenditure on scientists and engineers versus R&D subsidies. CESifo Working Paper No. 1225. Hall, B.H. (2004). Innovation and Diffusion. NBER Working Paper No. 10212. Hall, E. and C.I. Jones (1999). 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NBER Working Paper No. 10603. OECD (2000a). Knowledge, Technology and Economic Growth: Recent Evidence from OECD Countries. OECD Working Papers No. 259. OECD (2000b). The Internalisation of Venture Capital Activities in OECD Countries: Implication of Measurement and Policy’, OECD Working Paper, December 2000. OECD (2002). Small and Medium Enterprise Outlook. Parente, S.L. and E.C. Prescott (2000). Barriers to Riches. The MIT Press. Ramirez, C.D. and L.H. Tan (2003). Singapore, Inc. Versus the Private Sector: Are Government-Linked Companies Different?. IMF Working Paper WP/03/156. Romer, P. (1986). Increasing Returns and Long-Run Growth. Journal of Political Economy, 94, pp.1002-1037. Rosenberg, N. (1982). Inside the Black Box: Technology and Economics. Cambridge University Press. Schumpeter, J.A. (1934). The Theory of Economic Development. Harvard University Press. 93 Tay, R. (1993). An Ordinal Probit Analysis of Entrepreneurship. Working Paper Series No: 28-93, School of Accountancy and Business, Nanyang Technological University. Tobin, J. (1959). On the Predictive Value of Consumer Intentions and Attitudes. Review of Economics and Statistics, 41, pp. 1-11. Van Praag, M. (1996). Determinants of Successful Entrepreneurship. Thesis Publishers Book No. 107 of the Tinbergen Institute Research Series. Wong, P.K. (2002). Globalization of American, European and Japanese Production Networks and The Growth of Singapore’s Electronics Industry”, International Journal of Technology Management , 24 (7/8), pp. 843-869. Wong, P.K. and A. Singh (2004). The pattern of innovation in the knowledge-intensive services sector of Singapore., Singapore Management Review, 26(1), pp. 21-44. Wooldridge, J.M. (2002). Econometric Analysis of Cross Section and Panel Data. MIT Press. Zhang, J., P.K. Wong and P.H. Soh (2003). Network ties, prior knowledge, and the acquisition of resources in high tech entrepreneurship. Academy of Management Best Papers Proceedings 2003. 94 Appendix I –Survey Form Name of Interviewee Name of Company/Line of work Please rank in order of preference the type of employment you would ideally like to be in (1= self-employment(entrepreneurship), = employment in private sector(e.g. audit firms, banks, MNCs) How old are you? What is your education level? How many years have you been working in your current industry? If you are an entrepreneur, how many years of prior experience you have in a related industry/sector? PSLE O'/'N' level A' level Diploma University University (Bachelors) (Masters) University (PhD) 95 Are you married? (0= no, = yes) How many dependents you have? (e.g. number of children/parents/relatives you have to support) How much did your educational level affect your occupation choice? (1 = none, = a little, = some, = quite a lot, = a lot) If you had a higher educational qualification, you think you would have chosen a different type of employment? If so, which alternative type would you have chosen? What was the most important reason for you to start your own business or to remain in your current employment? 96 Do you believe that a GLC will receive financial rescue from the Government if it becomes unprofitable? (1 = not at all, = a little, = moderately, = quite a lot, = a lot) Do you believe that GLCs reduce the probability of success for entrepreneurs? (1 = not at all, = a little, = moderately, = quite a lot, = a lot) 10 How much does the regulation involved in setting up a business affect your job/occupation decision? (1 = not at all, = a little, = some, = quite a lot, = a lot) 11 Please describe any situations you have encountered with regard to regulation involved in setting up one's own business 12 Please describe your perception or experiences with Government-Linked Companies 13 14 97 15 Do you believe that GLCs reduce the profit that can be earned by entrepreneurs? (1 = none, = a little, = some, = quite a lot, = a lot) 16 Do you feel that Government-Linked Companies have an advantage over SMEs with regard to access to public procurement? (1 = none, = a little, = some, = quite a lot, = a lot) If none, please proceed to Question 19 17 Do you think that the procurement advantage is because of the status of the directors in the GLC? (1 = not at all, = a little, = some, = quite a lot, = a lot) 18 Do you think that the procurement advantage is because of the size of the GLC? (1 = not at all, = a little, = some, = quite a lot, = a lot) 98 19 Do you feel that GLCs have an advantage over SMEs with regard to obtaining credit? (1 = none, = a little, = some, = quite a lot, = a lot) If none, please proceed to Question 23 20 Do you think that the credit advantage is because of the creditworthiness of the directors in the GLC? (1 = not at all, = a little, = some, = quite a lot, = a lot) 21 Do you think that the credit advantage is because lenders believe that a GLC will be 'rescued' if it becomes unprofitable? (1 = not at all, = a little, = some, = quite a lot, = a lot) 22 Have you personally experienced or observed any of situations mentioned in Questions 19 to 21? (1 = never, = once or twice, = a few times, = many times, = all the time) 99 23 Do you believe that government policies favour the setting up of new firms? (1 = not at all, = a little, = moderately, = quite a lot, = a lot) 24 Do you believe that supporting new firms is a high priority for government policies? (1 = not at all, = a little, = moderately, = quite a lot, = a lot) 25 How much you like taking risks? (1 = not at all, = a little, = moderately, = quite a lot, = a lot) 100 Appendix II – Maple Worksheets For Maple worksheets, for ease of calculation, we express αˆ as a , w as ω and λ as u , where ≤ a ≤ and − 100 ≤ u ≤ 100 . All other notations are unchanged. ≤ t ≤1 We also note that the tax rate, t , is a fraction, that is: Objective function: a ⌠ ⌠ A := ( a, t ) /⎮ ( ( K t ) u) a da C p ⎮ ( ( K t ) p ) a da ⌡0 ⌡a ⌠ ⎮ C (1 K p) ⎮ ⎮ ⌡a a t u C p (1 K a) t p (1 K p) (1 K a) a da (2.13) Constraints: s := a t u C p (1 K a) t p (1 K p) (1 K a) (2.14) and ( (1 K t ) u)a K p ( (1 K t ) p)a a t u C p (1 K a) t p K (1 K p) (1 K p) (1 K a) a =0 (2.15) Lagrangian: L := ( a, t, u ) /A ( a, t ) C u ( ( ( K t ) u) a K p ( ( K t ) p ) a K ( K p ) sa ) (2.16) 101 Let and g_t := v L ( a, t, u ) vt g_a := and g_u := , v L ( a, t, u ) va v L ( a, t, u ) vu (2.17) (2.18) (2.19) When π = 4, w = 2, p = 0.5 s := 2.000000000 ( a t C 2.0 ( K a ) t ) 1Ka Using Maple to fsolve {g _ a, g _ t , g _ u} with π = 4, w = 2, p = 0.5 , subject to ≤ a ≤ , − 100 ≤ u ≤ 100 and ≤ t ≤ , we obtain: Simulation Result {u = 0.1501510813, a = 0.7530859503, t = 0.02589532365 } When π = 4.25, w = 2, p = 0.5 s := 2.000000000 ( a t C 2.125 ( K a ) t ) 1Ka Using Maple to fsolve {g _ a, g _ t , g _ u} with π = 4.25, w = 2, p = 0.5 , subject to ≤ a ≤ , − 100 ≤ u ≤ 100 and ≤ t ≤ , we obtain: Simulation Result {u = 0.3147851373, a = 0.5269572007, t = 0.06065565227 } 102 When π = 4.5, w = 2, p = 0.5 2.000000000 ( a t C 2.25 ( K a ) t ) 1Ka s := Using Maple to fsolve {g _ a, g _ t , g _ u} with π = 4.5, w = 2, p = 0.5 , subject to ≤ a ≤ , − 100 ≤ u ≤ 100 and ≤ t ≤ , we obtain: Simulation Result {a = 0.3794340348, t = 0.08148443836, u = 0.4710852672 } When π = 4.75, w = 2, p = 0.5 s := 2.000000000 ( a t C 2.375 ( K a ) t ) 1Ka Using Maple to fsolve {g _ a, g _ t , g _ u} with π = 4.75, w = 2, p = 0.5 , subject to ≤ a ≤ , − 100 ≤ u ≤ 100 and ≤ t ≤ , we obtain: Simulation Result {a = 0.2623374009, t = 0.09554851979, u = 0.6819065868 } When π = 5, w = 2, p = 0.5 s := 2.000000000 ( a t C 2.5 ( K a ) t ) 1Ka Using Maple to fsolve {g _ a, g _ t , g _ u} with π = 5, w = 2, p = 0.5 , subject to ≤ a ≤ , − 100 ≤ u ≤ 100 and ≤ t ≤ , we obtain: Simulation Result {a = 0.1649304165, t = 0.1050024901, u = 1.049503755 } 103 When π = 5.25, w = 2, p = 0.5 s := 2.000000000 ( a t C 2.625 ( K a ) t ) 1Ka Using Maple to fsolve {g _ a, g _ t , g _ u} with π = 5.25, w = 2, p = 0.5 , subject to ≤ a ≤ , − 100 ≤ u ≤ 100 and ≤ t ≤ , we obtain: Simulation Result {a = 0.08247405576, t = 0.1110644859, u = 1.993482002 } When π = 5.5, w = 2, p = 0.5 s := 2.000000000 ( a t C 2.75 ( K a ) t ) 1Ka Using Maple to fsolve {g _ a, g _ t , g _ u} with π = 5.5, w = 2, p = 0.5 , subject to ≤ a ≤ , − 100 ≤ u ≤ 100 and ≤ t ≤ , we obtain: Simulation Result {a = 0.01211109984, t = 0.1145965231, u = 12.75549163 } 104 Appendix III – The MNC’s Optimization Problem The MNC’s optimization problem when the fraction of time spent on education is that of the entrepreneur-type individual: ⎛ β dπ = [ pAτ θ − µλ ]⎜⎜ dτ ⎝1− β β ⎞⎛ pAβθτ θ −1 ⎞⎛ pAτ θ β ⎞ 1− β ⎟⎟ ⎟⎟⎜⎜ ⎟⎟⎜⎜ ⎠⎝ α + pAB ⎠⎝ α + pAB ⎠ β + pAθτ θ −1 ⎛ 1− β −⎜⎜ ⎝ 1− β ⎞ ⎟⎟ ⎠ ⎛ pAτ θ β ⎞ 1− β ⎛ ⎟⎟ − ( pAB − µ − α )⎜⎜ ⎜⎜ ⎝1− β ⎝ α + pAB ⎠ ⎞⎛ pAβθτ θ −1 ⎞⎛ pAτ θ β ⎞ 1− β ⎟⎟ ⎟⎟⎜⎜ ⎟⎟⎜⎜ ⎠⎝ α + pAB ⎠⎝ α + pAB ⎠ ⎛ 1− β ⎞ −⎜⎜ ⎟⎟ ⎝ 1− β ⎠ =0 (3.14) ⎛ β ⇒ [ pAτ θ − µλ ]⎜⎜ ⎝1− β ⎛ − ( pAB − µ − α )⎜⎜ ⎝1− β β −1 β ⎛ pAτ θ β ⎞ 1− β ⎞⎛ pAβθτ θ −1 ⎞⎛ pAτ θ β ⎞ 1− β ⎟⎟⎜⎜ ⎟⎟ ⎟⎟ ⎟⎟⎜⎜ + pAθτ θ −1 ⎜⎜ ⎠⎝ α + pAB ⎠⎝ α + pAB ⎠ ⎝ α + pAB ⎠ θ −1 θ ⎞⎛ pAβθτ ⎞⎛ pAτ β ⎞ ⎟⎟⎜⎜ ⎟⎟ ⎟⎟⎜⎜ α pAB α pAB + + ⎠⎝ ⎠⎝ ⎠ β 1− β (3.14A) =0 β −1 Dividing (3.14A) throughout by pAθτ θ −1 ⎛ β [ pAτ θ − µλ ]⎜⎜ ⎝1− β ⎛ pAτ θ β ⎞ 1− β ⎟⎟ and ⎜⎜ , we get: ⎝ α + pAB ⎠ β ⎞ ⎛ pAτ θ β ⎞ 1− β ⎞⎛ β ⎟⎟ ⎟⎟ + ⎜⎜ ⎟⎟⎜⎜ ⎠⎝ α + pAB ⎠ ⎝ α + pAB ⎠ ⎛ − ( pAB − µ − α )⎜⎜ ⎝1− β θ ⎞⎛ pAτ β ⎞ ⎞⎛ β ⎟⎟ ⎟⎟⎜⎜ ⎟⎟⎜⎜ ⎠⎝ α + pAB ⎠⎝ α + pAB ⎠ ⎛ β −1 ⎞ ⎟⎟ −⎜⎜ ⎝ 1− β ⎠ β ⎛ β −1 ⎞ ⎟ −⎜ 1− β ⎜⎝ 1− β ⎟⎠ (3.14B) =0 105 ⎛ β ⇒ [ pAτ − µλ ]⎜⎜ ⎝1− β θ ⎞ ⎛ pAτ θ β ⎞ ⎞⎛ β ⎟⎟ ⎟⎟ + ⎜⎜ ⎟⎟⎜⎜ ⎠⎝ α + pAB ⎠ ⎝ α + pAB ⎠ ⎞⎛ pAτ θ β ⎞ ⎛ ⎞⎛ β ⎟⎟ = ⎟⎟⎜⎜ ⎟⎟⎜⎜ − ( pAB − µ − α )⎜⎜ ⎝ − β ⎠⎝ α + pAB ⎠⎝ α + pAB ⎠ Multiply (3.14C) throughout by (1 − β )(α + pAB) β (3.14C) : ⎛ pAτ θ β ⎞ ⎟⎟ = ⎝ α + pAB ⎠ β [ pAτ θ − µλ ] + (1 − β ) pAτ θ − ( pAB − µ − α )⎜⎜ (3.14D) ⎛ pAτ θ β ⎞ ⎟⎟ = ⇒ β pAτ − βλµ + pAτ − β pAτ − ( pAB − µ − α )⎜⎜ ⎝ α + pAB ⎠ (3.14E) ⎛ pAτ θ β ⎞ ⎟⎟ = ⇒ pAτ − βλµ − ( pAB − µ − α )⎜⎜ ⎝ α + pAB ⎠ (3.14F) ⎡ ⎛ pAB − µ − α ⎞⎤ ⎟⎟⎥ = λµβ ⇒ pAτ θ ⎢1 − β ⎜⎜ ⎝ α + pAB ⎠⎦ ⎣ (3.14G) ⎛ α + pAB − β pAB + βµ + βα ) ⎞ λµβ ⎟⎟ = ⇒ τ θ ⎜⎜ α + pAB pA ⎝ ⎠ (3.14H) ⎛ α + pAB(1 − β ) + β (α + µ ) ⎞ λµβ ⎟⎟ = ⇒ τ θ ⎜⎜ α + pAB pA ⎝ ⎠ (3.15) θ θ θ θ ⇒τ z t , et + ⎡ ⎤θ λµβ (α + pAB) =⎢ ⎥ >0 ⎣ pA[α + pAB(1 − β ) + β (α + µ )] ⎦ (3.16) 106 [...]... provide a wider perspective and understanding of entrepreneurship in Singapore I sincerely hope you find this thesis insightful and interesting reading 3 Chapter One: Perceptions of Government-Linked Companies and Entrepreneurship in Singapore 1.1 Introduction Singapore s economy has gained significantly from entrepreneurship as is evident with the success of Singaporean firms such as Creative Technologies... necessary step in the promotion of entrepreneurship in 11 Singapore therefore is to consolidate these opinions and quantify the effect of these perceptions on the occupational choice of Singaporeans 1.4 Survey Method and Findings This section describes the survey method, the profile of the respondents who participated in the survey collection, initial survey findings as well as provides support for using surveys... and other pro -entrepreneurship policies, we complete the thesis by examining what influences an individual’s decision on how much time to spend on education to prepare for the occupation he has chosen In particular, we point out the relationship between an individual’s allocation of time towards education and a Multi-National Corporation (MNC)’s decision to transfer knowledge We find that only entrepreneur-type... out to capture Singaporeans’ perceptions and opinions on GLCs However, as far as I am aware, there has not yet been a study which combines the above-mentioned approaches, that is, an analysis which examines the effect of the perceptions of GLCs on individuals’ occupational choice between entrepreneurship and salaried work As GLCs will continue to form an integral part of Singapore s economy, it is imperative... questions were also included in the surveys to allow respondents to offer their own alternative explanations The simplicity of the survey questions was essential in order to minimize the difference in responses due to the varying interpretation of questions by respondents and to maximize the value of respondents’ differences in expectations and perceptions It is important to note that the responses... based on what they say and not just based on conventional market indicators This is particularly necessary when analyzing perception as there is often a lag period for perceptions to be manifested into action In addition, perception prevents agents from venturing into certain market activities and thus these components are not captured in reported GDP figures or national statistics3 Likewise, as long... conduct a study of agents’ perception using econometric analysis on key economic indicators such as the output of their company or other statistical data on industries Such an approach will only capture what has occurred and not the mindset and prior beliefs underlying the actions Rather, since we are interested in the cognitive process of economic agents – specifically how the perceptions that economic... opinion that banks and other financial institutions are more willing to lend to GLCs In this sense, individuals who are inclined towards entrepreneurship might not attempt to start their own business as they perceive that GLCs possess a credit advantage over entrepreneurs This dummy variable captures the extent to which this perception affects occupation preference 24 9 Risk-taking inclination Respondents’... Companies is intrinsically linked to the time of the British Government’s abrupt withdrawal of their presence from Singapore in the 1960s, leaving the Singapore Government with the dilemma of rising unemployment as well as shipyards and ports which the British troops had left behind The Government’s immediate mission therefore was to get involved in businesses which would accelerate Singapore' s economic... of 155 responses taken into consideration, which is sufficient for a reasonable analysis Only data from initial interviews were used to avoid the problem of double-counting Table 1.1 shows the occupation profile of the respondents and Table 1.2 shows the age profile of the respondents 2 For example, in the survey work by Blinder et al (1998), taking into account the firm’s turnover in relation to GDP . you find this thesis insightful and interesting reading. 4 Chapter One: Perceptions of Government-Linked Companies and Entrepreneurship in Singapore 1.1. Introduction Singapore s. approach to analysing entrepreneurship in Singapore by considering each of these issues. We begin by examining the factors affecting the occupational choice of Singaporeans towards entrepreneurship. necessary step in the promotion of entrepreneurship in 12 Singapore therefore is to consolidate these opinions and quantify the effect of these perceptions on the occupational choice of Singaporeans.