Abstract

http://ssrn.com/abstract=1508274
 
 

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The Effect of Entrepreneurial Activity on National Economic Growth


Andre J. Van Stel


Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics

Martin A. Carree


University of Maastricht - Department of Organization & Strategy

Roy Thurik


Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC); Erasmus Research Institute of Management (ERIM); EIM Netherlands - Business and Policy Research; Tinbergen Institute

2005

University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship

Abstract:     
Entrepreneurial activity impacts economic growth in many ways.This paper focuses on the effect of entrepreneurial activity on economic growth at a national level.More specifically, it explores whether differences in startup activities and the presence of nascent firms across countries has an influence on the country's economic performance.Previous research regarding the relationship between entrepreneurial activity and economic growth and its reliance on the economic stage of development is presented. A description of the Total Entrepreneurial Activity (TEA) data collected by the Global Entrepreneurship Monitor (GEM) is presented, as is a description of the Growth Competitiveness Index (GCI) used by the World Economic Forum's Global Competitiveness Report (GCR).The data for this study were collected using four variables, such as the TEA, GDP growth, gross national income per capital (GNIC), and GCI. Regression analyses and several specific models were used to analyze the data. The TEA rate appears to have an impact on GDP-growth, but it is not a simple linear effect.For poorer and developing countries, the TEA rate has a negative effect on economic growth.In contrast, the TEA rate has a positive effect on rich countries.The effect of entrepreneurship on economic growth may be better understood via the theories of Schumpeter.Explanations of the findings are discussed. (AKP)

Keywords: World Economic Forum's Global Competitiveness Report (GCR), Gross National Income (GNI), Entrepreneurial activity, Growth Competitive Index (GCI), Total Entrepreneurial Activity index (TEA), Global Entrepreneurship Monitor (GEM), Developing countries, Developed countries, Schumpeter, Joseph A., Gross Domestic Product (GDP), Economic development, Economic growth, Startups, Startup rates

Accepted Paper Series


Not Available For Download

Date posted: November 18, 2009  

Suggested Citation

van Stel, Andre J. and Carree, Martin A. and Thurik, Roy, The Effect of Entrepreneurial Activity on National Economic Growth (2005). Small Business Economics, Vol. 24, Issue 3, p. 311-321 2005. Available at SSRN: http://ssrn.com/abstract=1508274

Contact Information

Andre J. Van Stel (Contact Author)
Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )
Kahlaische Strasse 10
D-07745 Jena, 07745
Germany
Martin A. Carree
University of Maastricht - Department of Organization & Strategy ( email )
P.O. Box 616
Maastricht, 6200 MD
Netherlands
Roy Thurik
Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC) ( email )
3000 DR Rotterdam
Netherlands
+31 10 408 2232 (Phone)
+31 10 408 9146 (Fax)
HOME PAGE: http://www.thurik.com
Erasmus Research Institute of Management (ERIM) ( email )
P.O. Box 1738
3000 DR Rotterdam
Netherlands
EIM Netherlands - Business and Policy Research
Postbus 7001
2701 AA Zoetermeer
Netherlands
+31 79 341 3634 (Phone)
+31 79 331 3742 (Fax)
Tinbergen Institute ( email )
Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands
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