The Outlier Phenomenon in Entrepreneurship and Economic Growth: Mollycoddling Policies Create New Zealand's Perfect Storm
Frontiers of Entrepreneurship Research 2006
15 Pages Posted: 11 Feb 2009 Last revised: 10 Mar 2009
Date Written: January 21, 2009
Analyzing GEM 2005 data, we confirm that entrepreneurship and economic development form a U-shaped curve. We seek to understand New Zealand's large deviation from the modeled curve by factor-analyzing all countries' deviations from the curve. We make recommendations that would move New Zealand toward the trend line and thus aid in increasing its level of economic development. Our findings indicate that measures that overprotect workers, spoil incentives, or indulge welfare passivity can stymie economic growth even in conditions of high entrepreneurial activity.
JEL Classification: M13
Suggested Citation: Suggested Citation