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Entrepreneurship and unemployment: a nonlinear bidirectional causality

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  • Joao Ricardo Faria
  • Juan Carlos Cuestas
  • Estefania Mourelle

Abstract

This paper tests the view that the relation between unemployment and entrepreneurship is dynamic and possibly nonlinear. It performs Granger-causality tests and STAR-EXT estimation to assess the causality direction and the nonlinear nature of the relation for a set of OECD countries. The results reveal a bidirectional and nonlinear relation between business creation and changes in unemployment.

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File URL: http://www.ntu.ac.uk/research/document_uploads/85416.pdf
File Function: First version, 2008
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Bibliographic Info

Paper provided by Nottingham Trent University, Nottingham Business School, Economics Division in its series Working Papers with number 2008/6.

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Date of creation: Jun 2008
Date of revision:
Handle: RePEc:nbs:wpaper:2008/6

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Web page: http://www.ntu.ac.uk/nbs

Related research

Keywords: New firms; employment creation; causality; nonlinearities; STAR-EXT;

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References

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Citations

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Cited by:
  1. Faria, João Ricardo & Cuestas, Juan Carlos & Gil-Alana, Luis A., 2009. "Unemployment and entrepreneurship: A cyclical relation?," Economics Letters, Elsevier, vol. 105(3), pages 318-320, December.
  2. Sipos-Gug Sebastian & Badulescu Alina-Daciana, 2013. "Entrepreneurial Activity In Romania - A Time Series Clustering Analysis At The Nuts3 Level," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 673-682, July.
  3. Gohmann, Stephan F. & Fernandez, Jose M., 2014. "Proprietorship and unemployment in the United States," Journal of Business Venturing, Elsevier, vol. 29(2), pages 289-309.

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