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Government expenditure and entrepreneurial activity: considering the types of entrepreneurial motivations

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  • Wondwossen Kiflu Woldemichael
  • Younghwan Kim
  • Wonjoon Kim

Abstract

As a cross-national study, we analyze the relationship between the functional-level government expenditure and the different types of entrepreneurship, that is, whether it is an opportunity- or necessity-based entrepreneurship. Our analysis of 17 Organization for Economic Cooperation and Development (OECD) nations revealed that government investments in economic affairs are positively related to opportunity-driven entrepreneurship, but negatively to necessity-driven entrepreneurship. On the other hand, government spending on education is positively related to necessity-driven entrepreneurship. Further, we find that larger government expenditure on education in Asian countries encourages more entrepreneurs to start their businesses than the rest of the OECD.

Suggested Citation

  • Wondwossen Kiflu Woldemichael & Younghwan Kim & Wonjoon Kim, 2025. "Government expenditure and entrepreneurial activity: considering the types of entrepreneurial motivations," Applied Economics Letters, Taylor & Francis Journals, vol. 32(10), pages 1421-1425, June.
  • Handle: RePEc:taf:apeclt:v:32:y:2025:i:10:p:1421-1425
    DOI: 10.1080/13504851.2024.2305671
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