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Entrepreneurship and unemployment: A nonlinear bidirectional causality?

Joao Faria (), Juan Cuestas and Estefanía Mourelle

Economic Modelling, 2010, vol. 27, issue 5, 1282-1291

Abstract: This paper tests the view that the relation between unemployment and entrepreneurship is dynamic and possibly nonlinear. It performs Granger-causality tests and STAR-EXT estimation to assess the causality direction and the nonlinear nature of the relation for a set of OECD countries. The results reveal a bidirectional and nonlinear relation between business creation and changes in unemployment.

Keywords: New; firms; Employment; creation; Causality; Nonlinearities; STAR-EXT (search for similar items in EconPapers)
Date: 2010
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