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Entrepreneurship and Reforms in Developing Countries

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  • Baliamoune-Lutz, Mina

Abstract

We examine how institutional and policy reforms affect the relationship between entrepreneurship and growth. We perform Arellano-Bond GMM estimations on annual data (over the period 1990-2002) from a large group of developing countries and focus in particular on the interplay between policy and institutional reforms and entrepreneurship. We find that the joint effect of trade reform and entrepreneurship on growth is negative, suggesting that trade reform diminishes the positive effects of entrepreneurial ability on growth, while the joint effect of financial sector reform and entrepreneurship has a non-linear impact on growth. Financial sector reforms enhance the growth effect of entrepreneurship at initial levels and diminish it at high levels of reform. In addition, we find that the interplay of institutional reform and entrepreneurship does not seem to matter for the growth effects of entrepreneurship.

Suggested Citation

  • Baliamoune-Lutz, Mina, 2009. "Entrepreneurship and Reforms in Developing Countries," WIDER Working Paper Series 004, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:rp2009-04
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    Cited by:

    1. Fidrmuc, Jan & Karaja, Elira, 2013. "Uncertainty, informational spillovers and policy reform: A gravity model approach," European Journal of Political Economy, Elsevier, vol. 32(C), pages 182-192.
    2. Rettberg, Angelika, 2016. "Need, creed, and greed: Understanding why business leaders focus on issues of peace," Business Horizons, Elsevier, vol. 59(5), pages 481-492.
    3. Zuzana Brixiova, 2010. "Unlocking Productive Entrepreneurship in Africa’s Least Developed Countries," African Development Review, African Development Bank, vol. 22(3), pages 440-451.
    4. Brixiova, Zuzana & Ncube, Mthuli, 2013. "Entrepreneurship and the Business Environment in Africa: An Application to Ethiopia," IZA Discussion Papers 7553, Institute for the Study of Labor (IZA).
    5. Lin, H.E., 2010. "Effects of strategy, context and antecedents and capabilities on the outcomes of ambidexterity – A multiple country case study of the US, China and Taiwan," Other publications TiSEM c0eab7d6-d6c7-4b55-9822-1, Tilburg University, School of Economics and Management.
    6. Jan Fidrmuc & Elira Karaja & Ariane Tichit, 2012. "Reform, Uncertainty and Spillovers - A Gravity Model Approach," CESifo Working Paper Series 3745, CESifo Group Munich.

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    Keywords

    growth; entrepreneurship; institutions; policy reform;

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