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The Effect of Entrepreneurial Activity on Economic Growth

  • David Urbano
  • Sebastian Aparicio
  • David B. Audretsch
Chapter
Part of the International Studies in Entrepreneurship book series (ISEN, volume 41)

Abstract

Focused on those consequences of entrepreneurial activity, this chapter estimates the effect of entrepreneurship on economic growth. To this purpose, our modeling relies on a traditional Cobb–Douglas production function, which allows the examination of possible factors such as entrepreneurship that may be also important to foster economic growth. A panel data model over 43 countries in the period from 2002 to 2012 is assessed. We find that entrepreneurial activity, approached through overall TEA, opportunity and necessity TEA, effectively influences economic growth, though overall and opportunity TEA have a higher effect than necessity driven entrepreneurship. Comparisons across countries and periods of time are also conducted. These analyses show that overall TEA seems to have a higher influence on economic growth of non-OECD countries than on their OECD counterpart. We also find that overall TEA has a higher effect on growth across countries during post-crisis period than during pre-crisis period. These results could be useful for both theoretical discussion and public strategy design, in which entrepreneurship may be considered a policy mechanism.

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • David Urbano
    • 1
  • Sebastian Aparicio
    • 2
  • David B. Audretsch
    • 3
  1. 1.Department of BusinessUniversitat Autònoma de BarcelonaBellaterraSpain
  2. 2.Durham University Business SchoolDurham UniversityDurhamUK
  3. 3.Institute for Development Strategies, School of Public and Environmental AffairsIndiana UniversityBloomingtonUSA

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