Testing Unemployment–Entrepreneurship Nexus in Namibia Using the Schumpeterian Approach

Johanna Pangeiko Nautwima, Asa Romeo Asa () and Sulaiman Olusegun Atiku
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Johanna Pangeiko Nautwima: Namibia Business School, University of Namibia, Windhoek 13301, Namibia
Asa Romeo Asa: Namibian-German Institute for Logistics, Namibia University of Science and Technology, Windhoek 13388, Namibia
Sulaiman Olusegun Atiku: Harold Pupkewitz Graduate School of Business, Namibia University of Science and Technology, Windhoek 13388, Namibia

Sustainability, 2023, vol. 15, issue 18, 1-15

Abstract: This study uses time series data from the World Bank database to examine the relationship between unemployment and entrepreneurship in Namibia. We applied the Augmented Dickey–Fuller and Phillips–Perron tests for unit root testing and found all the variables to be stationary after the first difference. Given that, we employed the Johansen–Juselius test to measure cointegration, which revealed the absence of long-run relationships between the variables. Hence, we performed a Vector Autoregressive model to estimate the short-run relationships and found that Namibia exhibits both the refugee and Schumpeter effects. Finally, we measured the direction of causality using the Pairwise Granger causality test, and the results revealed that none of the variables Granger causes the other, implying that they are all independent of each other. This implies that the significance of entrepreneurship in addressing unemployment in Namibia is limited in the long run, mostly owing to the absence of sustainable business ventures. Therefore, we recommend prioritizing the development of policies to tackle unemployment through sustainable entrepreneurship.

Keywords: entrepreneurship; unemployment; unit root; Johansen–Juselius cointegration; VAR model; OLS; Granger causality; Namibia (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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