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Do government private subsidies crowd out entrepreneurship ?

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  • Islam, Asif

Abstract

Although several studies have found a negative relationship between government spending and entrepreneurship, much debate remains regarding the components of government spending responsible for this association. This paper contributes to the literature by specifically exploring the relationship between government private subsidies and entrepreneurship. By combining macroeconomic government spending data with individual level entrepreneurship data, the paper finds a negative association between the share of private subsidies and entrepreneurship. However, findings are less straightforward when the analysis delves deeper into the components of private subsidies and their association with different kinds of entrepreneurship.

Suggested Citation

  • Islam, Asif, 2014. "Do government private subsidies crowd out entrepreneurship ?," Policy Research Working Paper Series 6917, The World Bank.
    • Handle: RePEc:wbk:wbrwps:6917
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    References listed on IDEAS

    as
    1. Saul Estrin & Tomasz Mickiewicz, 2011. "Institutions and female entrepreneurship," Small Business Economics, Springer, vol. 37(4), pages 397-415, November.
    2. Ruta Aidis & Saul Estrin & Tomasz Mickiewicz, 2012. "Size matters: entrepreneurial entry and government," Small Business Economics, Springer, vol. 39(1), pages 119-139, July.
    3. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Urban Economics; Taxation&Subsidies; Economic Theory&Research; Emerging Markets; Education for the Knowledge Economy;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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