Entrepreneurship and the Allocation of Government Spending Under Imperfect Markets

Asif Islam

World Development, 2015, vol. 70, issue C, 108-121

Abstract: Previous studies have established a negative relationship between total government spending and entrepreneurship activity. However, the relationship between the composition of government spending and entrepreneurship has been woefully under-researched. We fill this gap by empirically exploring the relationship between government spending in social and public goods and entrepreneurial activity under the assumption of credit market imperfections. By combining macroeconomic government spending data with individual-level entrepreneurship data we find a positive relationship between increasing the share of social and public goods at the cost of private subsidies and entrepreneurship while confirming a negative relationship between total government consumption and entrepreneurial activity.

Keywords: entrepreneurship; fiscal policy; market failure (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0305750X15000030
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Entrepreneurship and the allocation of government spending under imperfect markets (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:70:y:2015:i:c:p:108-121

DOI: 10.1016/j.worlddev.2015.01.002

Access Statistics for this article

World Development is currently edited by O. T. Coomes

More articles in World Development from Elsevier
Bibliographic data for series maintained by Catherine Liu ().