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Entrepreneurship and unemployment: A nonlinear bidirectional causality?

  • Faria, João Ricardo
  • Cuestas, Juan Carlos
  • Mourelle, Estefanía

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.sciencedirect.com/science/article/pii/S0264-9993(10)00032-5
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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 27 (2010)
Issue (Month): 5 (September)
Pages: 1282-1291

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Handle: RePEc:eee:ecmode:v:27:y:2010:i:5:p:1282-1291
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30411

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  1. Serena Ng & Pierre Perron, 2001. "LAG Length Selection and the Construction of Unit Root Tests with Good Size and Power," Econometrica, Econometric Society, vol. 69(6), pages 1519-1554, November.
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  7. Luis Eduardo Arango & Andrés González, 1998. "Some Evidence Of Smooth Transition Nonlinearity In Colombian Inflation," BORRADORES DE ECONOMIA 003515, BANCO DE LA REPÚBLICA.
  8. Hannu Tervo, 2006. "Regional unemployment, self-employment and family background," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 1055-1062.
  9. David B. Audretsch & A. Roy Thurik, 2000. "Capitalism and democracy in the 21st Century: from the managed to the entrepreneurial economy," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 17-34.
  10. David Audretsch & Roy Thurik, 2004. "A Model of the Entrepreneurial Economy," Papers on Entrepreneurship, Growth and Public Policy 2004-12, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  11. van Dijk, D.J.C. & Franses, Ph.H.B.F., 1997. "Modelling Multiple Regimes in the Business Cycle," Econometric Institute Research Papers EI 9734/A, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
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  18. Philipp D. Koellinger & A. Roy Thurik, 2012. "Entrepreneurship and the Business Cycle," The Review of Economics and Statistics, MIT Press, vol. 94(4), pages 1143-1156, November.
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  25. 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.
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