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Entrepreneurship and the business cycle

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  • Roy Thurik

    (Erasmus School of Economics, Rotterdam, and Free University Amsterdam, the Netherlands, and Montpellier Business School, France)

Abstract

Entrepreneurship has a cyclical component, raising two questions. Is the entrepreneurship cycle related to the business cycle? And is there causality? A two-way relationship between entrepreneurship and the business cycle would be in line with the two faces of entrepreneurs: as agents of change creating upswings (opportunity entrepreneurship) and as rational actors escaping unemployment by setting up a business (necessity entrepreneurship). Nascent entrepreneurship can indeed be precyclical, implying that the two faces of entrepreneurship also show up in the business cycle, with promising policy implications.

Suggested Citation

  • Roy Thurik, 2014. "Entrepreneurship and the business cycle," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-90, October.
  • Handle: RePEc:iza:izawol:journl:y:2014:n:90
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    More about this item

    Keywords

    entrepreneurship; business cycle; precyclicality; nascent entrepreneurship;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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