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Can Oil-Rich Countries Encourage Entrepreneurship? ‘Yes’, ‘No’ but not ‘Perhaps’

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  • Mohammad Reza Farzanegan

    ()
    (University of Marburg)

Abstract

This study provides the first empirical investigation to test one of transmission channels of resource curse, i.e., marginalized entrepreneurship activities. Our panel data analysis of 65 countries from 2004 to 2011 shows a negative and statistically significant association between oil rents dependency and entrepreneurship indicator. This finding is robust to control of other major drivers of entrepreneurship, unobservable country and time fixed effects and a different measurement of oil rents dependency. Additionally our main results show that government effectiveness among other dimensions of good governance has a statistically significant moderating effect in entrepreneurship-oil rents nexus.

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Bibliographic Info

Paper provided by Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) in its series MAGKS Papers on Economics with number 201406.

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Length: 30 pages
Date of creation: 2014
Date of revision:
Publication status: Forthcoming in
Handle: RePEc:mar:magkse:201406

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Keywords: resource curse; oil rents; entrepreneurship; governance; business formation;

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References

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Cited by:
  1. Mohammad Reza Farzanegan & Mohammad Habibpour, 2014. "Direct Distribution of Rents and the Resource Curse in Iran: A Micro-econometric Analysis," CESifo Working Paper Series 4824, CESifo Group Munich.

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