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A County-Level Assessment Of Entrepreneurship And Economic Development In Appalachia Using Simultaneous Equations

Author

Listed:
  • MARIBEL N. MOJICA

    (Department of Agriculture Alcorn State University, 1000 ASU Dr. #750 Alcorn State, MS 39096, USA)

  • TESFA G. GEBREMEDHIN

    (Division of Resource Management, West Virginia University, P. O. Box 6108, Morgantown, WV 26506-6108, USA)

  • PETER V. SCHAEFFER

    (Division of Resource Management, West Virginia University, P. O. Box 6108, Morgantown, WV 26506-6108, USA)

Abstract

Entrepreneurship is now recognized as a strategy to achieve economic growth in many regions. The goal of this paper is to increase the understanding of entrepreneurship's contributions to economic growth and its potential as a development strategy for a region, such as Appalachia, characterized by poverty and underdevelopment. Using data on Appalachian counties, a system of simultaneous equations is empirically estimated to measure the effects of entrepreneurship on economic growth and development. An expanded Carlino-Mills growth model is used where changes in population, employment and per capita income represent measures of growth. Proprietorship and firm formation rate data are used to measure entrepreneurial activity. The results show start-up businesses contribute significantly to determining population growth. Employment growth is positively affected by self-employment rates as well as by firm formation rates. In terms of policy implications, the paper recommends the creation of an environment to encourage entrepreneurial activity as a strategy to battle unemployment. It concludes that regional policy makers need to renew their efforts to support the growth of self-employment and sustain the existing firms.

Suggested Citation

  • Maribel N. Mojica & Tesfa G. Gebremedhin & Peter V. Schaeffer, 2010. "A County-Level Assessment Of Entrepreneurship And Economic Development In Appalachia Using Simultaneous Equations," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 15(01), pages 3-18.
    • Handle: RePEc:wsi:jdexxx:v:15:y:2010:i:01:n:s1084946710001452
    DOI: 10.1142/S1084946710001452
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    References listed on IDEAS

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    1. Deller, Steven C., 2007. "The Role of Microenterprises in Economic Growth: A Panel Study of Wisconsin Counties 1977 to 1997," Staff Papers 92140, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
    2. André Stel & Kashifa Suddle, 2008. "The impact of new firm formation on regional development in the Netherlands," Small Business Economics, Springer, vol. 30(1), pages 31-47, January.
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    Cited by:

    1. Pankaj C. Patel & Srikant Devaraj, 2022. "Non-employer establishments and economic development in counties: evidence from cross-border neighbor county-pairs in the US," Small Business Economics, Springer, vol. 58(1), pages 77-92, January.
    2. Fatima Sirelkhatim & Yagoub Gangi, 2015. "Entrepreneurship education: A systematic literature review of curricula contents and teaching methods," Cogent Business & Management, Taylor & Francis Journals, vol. 2(1), pages 1052034-105, December.
    3. Folorunsho M. Ajide & James T. Dada, 2023. "Poverty, entrepreneurship, and economic growth in Africa," Poverty & Public Policy, John Wiley & Sons, vol. 15(2), pages 199-226, June.
    4. Yagoub Ali Gangi & Alamedin Abdallah Bannaga & Omer Abker, 2023. "Institutional Environment, Entrepreneurial Activities and Economic Growth across Selected Arab Countries," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 13(4), pages 89-117.

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