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Business Ownership and Economic Growth in 23 OECD Countries

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Author Info

  • Martin Carree

    ()
    (Maastricht University, Erasmus University Rotterdam)

  • André van Stel

    ()
    (EIM, Zoetermeer)

  • Roy Thurik

    ()
    (Erasmus University Rotterdam, EIM, Zoetermeer)

  • Sander Wennekers

    (EIM, Zoetermeer)

Abstract

In the present paper we address the relationship between the extentof business ownership (self-employment) and economic development. We will focusupon three issues. First, how is the equilibrium rate of business ownershiprelated to the stage of economic development? Second, what is the speed ofconvergence towards the equilibrium rate when the rate of business ownership is out-of-equilibrium? Third, to what extent does deviating from the equilibrium rate of business ownership lead to less economic growth? Hypotheses concerning all three issues are formulated setting up a new two-equation model. We findconfirmation for the hypothesised effects using a data panel of 23 OECD countries. An important policy implication of our exercises is that low barriers to entry and exit of self-employed/businesses are necessary conditions for the equilibrium seeking mechanisms that are vital for a sound economic development.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-001/3.

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Date of creation: 10 Feb 2000
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Handle: RePEc:dgr:uvatin:20000001

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Web page: http://www.tinbergen.nl

Related research

Keywords: business ownership; economic growth; entrepreneurship;

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Cited by:
  1. David B. Audretsch & Roy Thurik & Andre van Stel & M.A. Carree, 2006. "Does Self-Employment Reduce Unemployment?," Papers on Entrepreneurship, Growth and Public Policy, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group 2005-07, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  2. Pia Arenius & Maria Minniti, 2005. "Perceptual Variables and Nascent Entrepreneurship," Small Business Economics, Springer, Springer, vol. 24(3), pages 233-247, 02.
  3. Howard Frederick & Erik Monsen, 2011. "New Zealand’s perfect storm of entrepreneurship and economic development," Small Business Economics, Springer, Springer, vol. 37(2), pages 187-204, September.
  4. van Gelderen, Marco & Frese, Michael & Thurik, Roy, 2000. " Strategies, Uncertainty and Performance of Small Business Startups," Small Business Economics, Springer, Springer, vol. 15(3), pages 165-81.
  5. Antonio García-Tabuenca & José Luis Crespo-Espert & Juan R. Cuadrado-Roura, 2008. "Entrepreneurship, creative industries and regional dynamics in Spain," Working Papers, Instituto Universitario de Análisis Económico y Social 06/08, Instituto Universitario de Análisis Económico y Social.

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