The Relationship between Entrepreneurship and Unemployment: is Portugal an Outlier?

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The Relationship between Entrepreneurship and Unemployment: is Portugal an Outlier?

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Rui Baptista ()
Roy Thurik ()

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Abstract

The present paper examines the relationship between entrepreneurship, as measured by the variation in business ownership rates, and unemployment in Portugal in the period from 1972-2002. It concludes that Portugal has been a relative outlier in regard to the effects of entrepreneurship on unemployment when compared with the OECD average. Although the nature of entrepreneurship may be different in the Portuguese case, due to a high proportion of "micro-businesses" created for subsistence which have little impact on growth and employment, this factor does not seem to be the primary reason for the observed discrepancies. The differences between observed levels of unemployment for Portugal and those predicted by a model based on OECD data seem to be mostly associated with macroeconomic fluctuations associated with European business cycles and EU "cohesion" funding, as well as with adjustment costs to new technology adoption which lead to productivity slowdowns, thus increasing the time lag for the effect of entrepreneurship on employment beyond the OECD average.

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Publisher Info
Paper provided by Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy in its series Discussion Papers on Entrepreneurship, Growth and Public Policy with number 2004-40.

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Length: 21 pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:esi:egpdis:2004-40

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This paper has been announced in the following NEP Reports:

NEP-ALL-2004-09-05 (All new papers)
NEP-ENT-2004-09-05 (Entrepreneurship)
NEP-LAB-2004-09-05 (Labour Economics)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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Other versions:
- Joost van Acht & Joop Stam & Roy Thurik & Ingrid Verheul, 2004. "Business Ownership and Unemployment in Japan," Tinbergen Institute Discussion Papers 04-036/3, Tinbergen Institute. [Downloadable!]
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Other versions:
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Other versions:
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Other versions:
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Rui Baptista & Paulo Madruga & Vitor Escaria, . "Entrepreneurship, Regional Development and Job Creation: the Case of Portugal," Discussion Papers on Entrepreneurship, Growth and Public Policy 2005-06, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]
Audretsch, David B & Carree, Martin A & Thurik, A R Roy & van Stel, A J, 2005. "Does Self-Employment Reduce Unemployment?," CEPR Discussion Papers 5057, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- André van Stel & Roy Thurik & David Audretsch & Martin Carree, 2007. "Does self-employment reduce unemployemt?," Scales Research Reports H200709, EIM Business and Policy Research. [Downloadable!]
- A. Roy Thurik & Martin A. Carree & Andre van Stel & David B. Audretsch, 2007. "Does Self-Employment reduce Unemployment?," Jena Economic Research Papers 2007-089, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek. [Downloadable!]
- André van Stel & Roy Thurik & David Audretsch & Martin Carree, 2005. "Does Self-Employment Reduce Unemployment?," Scales Research Reports N200504, EIM Business and Policy Research. [Downloadable!]
- David B. Audretsch & Roy Thurik & Andre van Stel & M.A. Carree, 2006. "Does Self-Employment Reduce Unemployment?," Discussion Papers on Entrepreneurship, Growth and Public Policy 2005-07, Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. [Downloadable!]

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