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Business Ownership and Economic Growth in 23 OECD Countries

Author

Listed:
  • Martin Carree

    (Maastricht University, Erasmus University Rotterdam)

  • André van Stel

    (EIM, Zoetermeer)

  • Roy Thurik

    (Erasmus University Rotterdam, EIM, Zoetermeer)

  • Sander Wennekers

    (EIM, Zoetermeer)

Abstract

In the present paper we address the relationship between the extentof business ownership (self-employment) and economic development. We will focusupon three issues. First, how is the equilibrium rate of business ownershiprelated to the stage of economic development? Second, what is the speed ofconvergence towards the equilibrium rate when the rate of business ownership is out-of-equilibrium? Third, to what extent does deviating from the equilibrium rate of business ownership lead to less economic growth? Hypotheses concerning all three issues are formulated setting up a new two-equation model. We findconfirmation for the hypothesised effects using a data panel of 23 OECD countries. An important policy implication of our exercises is that low barriers to entry and exit of self-employed/businesses are necessary conditions for the equilibrium seeking mechanisms that are vital for a sound economic development.

Suggested Citation

  • Martin Carree & André van Stel & Roy Thurik & Sander Wennekers, 2000. "Business Ownership and Economic Growth in 23 OECD Countries," Tinbergen Institute Discussion Papers 00-001/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20000001
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    Cited by:

    1. Elif Bascavusoglu-Moreau, 2010. "Entrepreneurship and the National System of Innovation: What is Missing in Turkey?," WIDER Working Paper Series wp-2010-054, World Institute for Development Economic Research (UNU-WIDER).
    2. Antonio García-Tabuenca & José Crespo-Espert & Juan Cuadrado-Roura, 2011. "Entrepreneurship, creative industries and regional dynamics in Spain," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(3), pages 659-687, December.
    3. van Gelderen, Marco & Frese, Michael & Thurik, Roy, 2000. "Strategies, Uncertainty and Performance of Small Business Startups," Small Business Economics, Springer, vol. 15(3), pages 165-181.
    4. Boettke, Peter J. & Coyne, Christopher J., 2009. "Context Matters: Institutions and Entrepreneurship," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 5(3), pages 135-209, March.
    5. Howard Frederick & Erik Monsen, 2011. "New Zealand’s perfect storm of entrepreneurship and economic development," Small Business Economics, Springer, vol. 37(2), pages 187-204, September.
    6. Juan R. Cuadrado-Roura & Antonio García-Tabuenca, 2008. "Innovative and creative entrepreneurship in Spain," Working Papers 07/08, Instituto Universitario de Análisis Económico y Social.
    7. Bascavusoglu-Moreau, Elif, 2010. "Entrepreneurship and the National System of Innovation - What is Missing in Turkey?," MERIT Working Papers 2010-030, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Pia Arenius & Maria Minniti, 2005. "Perceptual Variables and Nascent Entrepreneurship," Small Business Economics, Springer, vol. 24(3), pages 233-247, February.
    9. José A. Belso Martínez, 2005. "Equilibrium entrepreneurship rate, economic development and growth. Evidence from Spanish regions," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 17(2), pages 145-161, March.

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    More about this item

    Keywords

    business ownership; economic growth; entrepreneurship;
    All these keywords.

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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