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The Lag Structure of the Impact of Business Ownership on Eco-nomic Performance in OECD Countries

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  • Martin Carree
  • Roy Thurik

Abstract

This note investigates the impact of changes in the number of business owners on three measures of economic performance, viz. employment growth, GDP growth and labor productivity growth. Particular attention is devoted to the lag structure. The analysis is performed at the country level for 21 OECD countries. Our results confirm earlier evidence on three stages in the impact of entry on economic growth: an initial direct positive effect, followed by a negative effect due to exiting capacities and finally a stage of positive supply-side effects. The net effect is positive for employment and GDP growth. Changes in the number of business owners have no effect on labor productivity.

Suggested Citation

  • Martin Carree & Roy Thurik, 2006. "The Lag Structure of the Impact of Business Ownership on Eco-nomic Performance in OECD Countries," Papers on Entrepreneurship, Growth and Public Policy 2006-02, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    • Handle: RePEc:esi:egpdis:2006-02
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    More about this item

    Keywords

    Business ownership; entrepreneurship; economic growth; lag structure;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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