A HOME-BASED entrepreneurship scheme by the Singapore government has effectively promoted business creation activities among businesses permitted to operate in residential properties, a National University of Singapore Business School study has found.
The findings showed that firms created under the scheme had higher productivity, lower risk and a higher survival rate. Firms that were created after the scheme was introduced had a lower exit rate of 29 per cent relative to other firms created before the scheme.According to the study, the scheme also affected the quality of newly created businesses under it. These new businesses were larger and had longer survival rates.
Using housing type as a proxy for entrepreneurs facing financial constraint, the study found that businesses in the treatment group attracted more entrepreneurs living in HDB flats. This indicated that reducing entry cost to start a business was important to encourage firm creation.