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An Empirical Relationship between Entrepreneurship and FDI. A Note

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  • Miltiades N. Georgiou
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    In the present note an effort will be made for a contribution to economic theory by estimating an econometric relationship between the foreign direct investment [FDI] and total economy’s entrepreneurship reward [rEM]. This note is based mainly on the next two papers. First, it will be based on the discussion paper “Understanding the Role of Entrepreneurship for Economic Growth.” by Martin Carree and Roy Thurik, MPIoE, #2005, in which the authors show the importance of entrepreneurship to adapt to new technology, to develop capacity and reach economies of scale. Second, it will be based on the discussion paper “Does Entrepreneurship Create Enough Jobs in Europe? A Note.” by Miltiades N. Georgiou, MPIoE, #0806, in which entrepreneurship reward [rEM] is measurable and consequently can be related with the other measurable economic variables like the [FDI]. Hence, in the present note a relationship between [FDI] and [rEM] can be numerically estimated. More specifically, it will be pointed out with panel data econometric analysis that in all Western European Countries and the United States [FDI] is positively related with [rEM], and that decisions about [FDI] are mainly affected by [rEM].

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    Paper provided by Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group in its series Papers on Entrepreneurship, Growth and Public Policy with number 2006-27.

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    Length: 12 pages
    Date of creation: Nov 2006
    Handle: RePEc:esi:egpdis:2006-27
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    1. Zoltán J. Ács & Colm O'Gorman & László Szerb & Siri Terjesen, 2015. "Could the Irish Miracle be Repeated in Hungary?," Chapters,in: Global Entrepreneurship, Institutions and Incentives, chapter 30, pages 584-603 Edward Elgar Publishing.
    2. Miltiades N. Georgiou, 2006. "Does Entrepreneurship create enough Jobs in Europe? A Note," Papers on Entrepreneurship, Growth and Public Policy 2006-08, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    3. Martin Carree & Roy Thurik, 2005. "Understanding the role of entrepreneurship for economic growth," Papers on Entrepreneurship, Growth and Public Policy 2005-10, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    4. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-583, June.
    5. Halkos, George E., 2003. "Environmental Kuznets Curve for sulfur: evidence using GMM estimation and random coefficient panel data models," Environment and Development Economics, Cambridge University Press, vol. 8(04), pages 581-601, October.
    6. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
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