The Lag Structure of the Impact of Business Ownership on Economic Performance in OECD Countries

Carree, Martin A.; Thurik, Roy

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The Lag Structure of the Impact of Business Ownership on Economic Performance in OECD Countries

ERIM Report Series Reference No. ERS-2006-064-ORG

17 Pages Posted: 23 Dec 2006

See all articles by Martin A. Carree

Martin A. Carree

University of Maastricht - Department of Organization & Strategy

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

Date Written: November 28, 2006

Abstract

This paper investigates the impact of changes in the number of business owners on three measures of economic performance, viz. employment growth, GDP growth and labor productivity growth. Particular attention is devoted to the lag structure. The analysis is performed at the country level for 21 OECD countries. Our results confirm earlier evidence on three stages in the impact of entry on economic performance: an initial direct positive effect, followed by a negative effect due to exiting capacities and finally a stage of positive supply-side effects. The net effect is positive for employment and GDP growth. Changes in the number of business owners have no effect on labor productivity.

Keywords: Entrepreneurship, Business Ownership, Economic Growth, Lag Structure

Suggested Citation: Suggested Citation

Carree, Martin A. and Thurik, Roy and Thurik, Roy, The Lag Structure of the Impact of Business Ownership on Economic Performance in OECD Countries (November 28, 2006). ERIM Report Series Reference No. ERS-2006-064-ORG, Available at SSRN: https://ssrn.com/abstract=949660