Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2007-02-13
Number: 07-022/3
Author-Name: Martin Carree
Author-Workplace-Name: University of Maastricht
Author-Name: André van Stel
Author-Email: vanstel@few.eur.nl
Author-Workplace-Name: EIM, Zoetermeer, Cranfield University School of Management, and Erasmus Universiteit Rotterdam
Author-Name: Roy Thurik
Author-Email: thurik@few.eur.nl
Author-Workplace-Name: Erasmus School of Economics, Erasmus Universiteit Rotterdam; EIM, Zoetermeer, Cranfield University School of Management, and Max Planck Institute of Economics, Jena, Germany
Author-Name: Sander Wennekers
Author-Workplace-Name: EIM, Zoetermeer, and Erasmus Universiteit Rotterdam
Title: The Relation between Economic Development and Business Ownership revisited
Abstract: This paper revisits the two-equation model of Carree, van Stel, Thurik and Wennekers (2002) where deviations from the ‘equilibrium’ rate of business ownership play a central role determining both the growth of business ownership and that of economic development. Two extensions of the original setup are addressed: using longer time series of averaged data of 23 OECD countries (up to 2004) we can discriminate between different functional forms of the ‘equilibrium’ rate and we allow for different penalties for being above or under the ‘equilibrium’ rate. The additional data do not provide evidence of a superior statistical fit of a U-shaped ‘equilibrium’ relationship when compared to an L-shaped one. There appears to be a growth penalty for having too few business owners but not so for having too many.
Classification-JEL: L26; O10
Keywords: entrepreneurship; economic development; economic growth; business ownership
File-Url: https://papers.tinbergen.nl/07022.pdf
File-Format: application/pdf
File-Size: 101479 bytes
Handle: RePEc:tin:wpaper:20070022