The dynamics of entrepreneurship: hysteresis, business cycles and government policy

Emilio Congregado, Antonio Golpe and Simon Parker ()

Empirical Economics, 2012, vol. 43, issue 3, 1239-1261

Abstract: This article estimates two unobserved components models to explore the macrodynamics of entrepreneurship in Spain and the USA. We ask whether entrepreneurship exhibits hysteresis, defined as a macrodynamic structure in which the cyclical component of entrepreneurship has persistent effects on the natural rate of entrepreneurship. We find evidence of hysteresis in Spain, but not the USA, while in Spain business cycle output variations significantly affect future rates of entrepreneurship. The article discusses implications of the findings for the design of entrepreneurship policies. Copyright Springer-Verlag 2012

Keywords: Hysteresis; Unobserved components model; Time series models; Business cycles; Self-employment; Entrepreneurship; C32; J23; M13 (search for similar items in EconPapers)
Date: 2012
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Working Paper: The Dynamics of Entrepreneurship: Hysteresis, Business Cycles and Government Policy (2009)
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DOI: 10.1007/s00181-011-0516-6

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