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Does Entrepreneurship reduce Unemployment?

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Author Info

  • D.B. Audretsch

    (Indiana University, CEPR, and EIM)

  • M.A. Carree

    ()
    (CASBEC, Erasmus University Rotterdam, University Maastricht, and EIM)

  • A.R. Thurik

    ()
    (CASBEC, Erasmus University Rotterdam, and EIM)

Abstract

In this paper, we develop two hypotheses: First, regional innovation efforts have a positive impact on regional knowledge based entrepreneurial activity. Second, knowledge based entrepreneurship positively affects regional economic performance. We test these hypotheses using county level data from West Germany, employing a structural equation model to analyze the relationships between latent variables. Our empirical analysis provides evidence supporting both hypotheses. In particular, our results suggest that innovation efforts have an indirect effect on economic performance via entrepreneurship. This indirect effect is neglected in existing empirical studies focusing on the direct effect of innovation on economic performance. See also 'Does Self-Employment reduce Unemployment?' in the 'Journal of Business Venturing' , 23(6), 2008, 673-86, by A. Roy Thurik, Martin A. Carree, Andre van Stel, David B. Audretsch.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 01-074/3.

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Date of creation: 02 Aug 2001
Date of revision: 24 Oct 2008
Handle: RePEc:dgr:uvatin:20010074

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

Related research

Keywords: entrepreneurship; unemployment; economic development; Gibrat's Law;

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References

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  1. Parker,Simon C., 2004. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521828130.
  2. Audretsch, David B. & Keilbach, Max, 2002. "Entrepreneurship Capital and Economic Performance," ZEW Discussion Papers 02-76, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Audretsch, David B. & Carree, Martin A. & van Stel, André J. & Thurik, A. Roy, 2000. "Impeded industrial restructuring : the growth penalty," HWWA Discussion Papers 114, Hamburg Institute of International Economics (HWWA).
  4. Audretsch, David B, et al, 2002. "Impeded Industrial Restructuring: The Growth Penalty," Kyklos, Wiley Blackwell, vol. 55(1), pages 81-97.
  5. Michael Fritsch & Pamela Mueller, 2004. "Effects of New Business Formation on Regional Development over Time," Regional Studies, Taylor & Francis Journals, vol. 38(8), pages 961-975.
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Citations

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Cited by:
  1. Poh Wong & Yuen Ho & Erkko Autio, 2005. "Entrepreneurship, Innovation and Economic Growth: Evidence from GEM data," Small Business Economics, Springer, vol. 24(3), pages 335-350, 01.
  2. Isabel Grilo & Roy Thurik, 2004. "Determinants of entrepreneurship in Europe," Papers on Entrepreneurship, Growth and Public Policy 2004-30, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  3. Carree, M.A. & Thurik, A.R., 2006. "The Lag Structure of the Impact of Business Ownership on Economic Performance in OECD Countries," ERIM Report Series Research in Management ERS-2006-064-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  4. Michael Fritsch & Pamela Mueller, 2004. "The Effects of New Business Formation on Regional Development over Time," Papers on Entrepreneurship, Growth and Public Policy 2004-36, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  5. Andre van Stel & Martin Carree & Roy Thurik, 2004. "The effect of entrepreneurship on national economic growth: an analysis using the GEM database," Papers on Entrepreneurship, Growth and Public Policy 2004-34, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  6. David Audretsch & Roy Thurik, 2004. "A Model of the Entrepreneurial Economy," Papers on Entrepreneurship, Growth and Public Policy 2004-12, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  7. Ingrid Verheul & Andre van Stel & Roy Thurik, 2004. "Explaining female and male entrepreneurship across 29 countries," Papers on Entrepreneurship, Growth and Public Policy 2004-08, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  8. Roy Thurik & Lorraine Uhlaner, 2004. "Post-Materialism: A Cultural Factor influencing Total Entrepreneurial Activity across Nations," Scales Research Reports N200321, EIM Business and Policy Research.
  9. Massimo FLORIO & Emanuele OZZIMO, 2006. "Innovation strategies for SMEs and clusters: the challenges of a globalised Europe," Departmental Working Papers 2006-16, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  10. André van Stel & Bart Diephuis, 2004. "Business dynamics and employment growth: A cross-country analysis," Scales Research Reports H200310, EIM Business and Policy Research.
  11. Yuen-Ping Ho & Poh-Kam Wong, 2007. "Financing, Regulatory Costs and Entrepreneurial Propensity," Small Business Economics, Springer, vol. 28(2), pages 187-204, March.

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