Resource Wealth and Entrepreneurship: A Blessing or a Curse?

Mohammad Reza Farzanegan ()

No 201224, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: Resource-rich countries of the Middle East and North Africa (MENA) have the highest youth unemployment rate in the world. While other parts of the world are experiencing an increasing trend in new firms’ formation as a potential solution for their unemployment problem, the MENA region has the lowest records in new business establishments. In this study, we investigate the reasons behind such a significant lag of the resource-rich countries in entrepreneurship. Panel data for more than 80 countries from 2004-2009 shows that higher dependence on resource rents reduces entrepreneurship activities. The decline is more significant in countries with higher levels of point resources such as oil and coal.

Keywords: resource curse; entrepreneurship; panel data (search for similar items in EconPapers)
JEL-codes: M13 O13 Q32 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2012
New Economics Papers: this item is included in nep-ara and nep-ent
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Citations: View citations in EconPapers (3)

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