Entrepreneurship and the Business Cycle
Tinbergen Institute Discussion Paper No. TI 09-032/3
20 Pages Posted: 13 May 2009
Date Written: April 20, 2009
We study the cyclical pattern of entrepreneurial activity. Results across 22 OECD countries for the period 1972-2007 show that entrepreneurial activity is a leading indicator of the business cycle in a Granger-causality sense. This contradicts existing theoretical hypotheses which predict that entrepreneurship is pro-cyclical or not cyclical. We discuss possible causes and policy implications of this finding.
Keywords: Entrepreneurship, Business cycle
JEL Classification: L26, E32
Suggested Citation: Suggested Citation