Steven F. Kreft (Department of Business Economics and Public Policy, Indiana University Kelley School of Business) Elham Mafi-Kreft (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)
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Many state and local governments have focused on enacting policies to promote entrepreneurship in an effort to enhance economic growth. This paper will test the relationship between entrepreneurial activity and state economic freedom in a Granger causality framework. We build a panel data set of freedom scores and entrepreneurial activity measures within the fifty US states from 1981 to 2003, and our results show that, as a whole, economic freedom causes entrepreneurship. However, we find evidence that once entrepreneurs are in place, they increase the size of government spending, which is contradictory to economic freedom.
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Paper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number
2007-03.
Find related papers by JEL classification: H7 - Public Economics - - State and Local Government; Intergovernmental Relations H4 - Public Economics - - Publicly Provided Goods H1 - Public Economics - - Structure and Scope of Government
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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.:
Blanchflower, David G & Oswald, Andrew J, 1998.
"What Makes an Entrepreneur?,"
Journal of Labor Economics,
University of Chicago Press, vol. 16(1), pages 26-60, January.
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