Business Dynamism and Economic Growth: U.S. Regional Evidence

Miguel Casares and Hashmat Khan ()

No 16-03, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: We document empirical evidence linking regional growth in the United States over the last 25 years with entrepreneurial activity, or `business dynamism'. The main data source is the Business Dynamics Statistics (BDS) released by the US Census Bureau. We uncover a new stylised fact: across US states, it is not the level but rather the change in business entry rate that has a significant positive relationship with regional growth. Specifically, those states that have experienced a relatively large decline in the entry rate also have had weaker economic growth. Besides, our research confirms earlier found stylised facts such as the high correlation between entry and exit rates, and the convergence hypothesis which holds across the states. We conduct a number of robustness checks to establish these new and old stylised facts and conditional correlations in the BDS data.

Keywords: Business dynamism; entry-exit rates; economic growth (search for similar items in EconPapers)
JEL-codes: O30 O40 O51 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2016-03-16, Revised 2016-10-31
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent, nep-gro and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published: Carleton Economic Papers

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Working Paper: Business Dynamism and Economic Growth: U.S. Regional Evidence (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:car:carecp:16-03

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