Do Government Private Subsidies Crowd Out Entrepreneurship?

12 Pages Posted: 20 Apr 2016

See all articles by Asif Islam

Asif Islam

World Bank - Development Economics Group (DEC)

Date Written: June 1, 2014


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.

Keywords: Urban Economics, Taxation & Subsidies, Economic Theory & Research, Emerging Markets, Education for the Knowledge Economy

Suggested Citation

Islam, Asif Mohammed, Do Government Private Subsidies Crowd Out Entrepreneurship? (June 1, 2014). World Bank Policy Research Working Paper No. 6917. Available at SSRN:

Asif Mohammed Islam (Contact Author)

World Bank - Development Economics Group (DEC) ( email )

1818 H Street N.W.
Washington, DC 20433
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics