Self-employment and economic growth in developing countries: is more self-employment better?

Sridevi Yerrabati

Journal of Economic Studies, 2021, vol. 49, issue 2, 315-329

Abstract: Purpose - The study aims to examine the non-linear relationship between self-employment and economic growth (growth) in the context of developing countries. Design/methodology/approach - Data from a sample of 83 developing countries covering a period 2002–2015 is used. The empirical analysis is based on the dynamic panel data estimation, and the results are estimated using the two-step system GMM technique. Non-linearity between self-employment and growth is validated using Sasabuchi (1980) and Lind and Mehlum (2010) (SLM) test. Findings - The empirical analysis suggests a non-linear and aU-shaped relationship between self-employment and growth, confirmed by the SLM test. The threshold levels for total self-employment, female self-employment and male self-employment are 57.49%, 58.86 and 55.81%. The findings are also robust to alternate estimation technique and alternate measure of the dependent variable. Practical implications - Policy implications of the findings include the need for policies that foster and channel self-employment properly as the higher level of self-employment is found to benefit growth. Originality/value - This study is the first attempt to examine the empirical relationship between self-employment and growth. As such, it makes a novel contribution to the extant literature on the relationship between the two variables.

Keywords: Self-employment; Economic growth; Developing countries; Dynamic panel data; Two-step system GMM; E24; J21; O47 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
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:eme:jespps:jes-08-2020-0419

DOI: 10.1108/JES-08-2020-0419

Access Statistics for this article

Journal of Economic Studies is currently edited by Prof Mohsen Bahmani-Oskooee

More articles in Journal of Economic Studies from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().