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Entrepreneurship and Reforms in Developing Countries

  • Baliamoune-Lutz, Mina

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.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2009/RP2009-04.pdf
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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper RP2009/04.

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Length: 16
Date of creation: 2009
Date of revision:
Handle: RePEc:unu:wpaper:rp2009-04
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  10. Levine, Ross & Loayza, Norman & Beck, Thorsten, 1999. "Financial intermediation and growth : Causality and causes," Policy Research Working Paper Series 2059, The World Bank.
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