Entrepreneurial efficiency: an analysis based on UK and German data

In this paper, we employ modern frontier efficiency analysis to investigate the ability of British and German entrepreneurs to use their age, education and experience to earn money in the period from 2000 to 2003. We find that the efficiency of selfemployed individuals has deteriorated from 79 in 2000 to 73 percent in 2003. Division into sub-groups provides several remarkable insights: (i) statistically viewed, German and British entrepreneurs are on average equally efficient; (ii) in all observed years male business owners outperform their female counterparts, nonetheless, there is a clear tendency to reduce this gap within period under consideration; and (iii) receiving windfall gains does not affect entrepreneurs’ efficiency in the next year.