Can Oil-Rich Countries Encourage Entrepreneurship? ‘Yes’, ‘No’ but not ‘Perhaps’

Mohammad Reza Farzanegan (farzanegan@uni-marburg.de)

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: This study provides the first empirical investigation to test one of transmission channels of resource curse, i.e., marginalized entrepreneurship activities. Our panel data analysis of 65 countries from 2004 to 2011 shows a negative and statistically significant association between oil rents dependency and entrepreneurship indicator. This finding is robust to control of other major drivers of entrepreneurship, unobservable country and time fixed effects and a different measurement of oil rents dependency. Additionally our main results show that government effectiveness among other dimensions of good governance has a statistically significant moderating effect in entrepreneurship-oil rents nexus.

Keywords: resource curse; oil rents; entrepreneurship; governance; business formation (search for similar items in EconPapers)
JEL-codes: M13 O13 Q32 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2014
New Economics Papers: this item is included in nep-ene and nep-ent
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Citations: View citations in EconPapers (6)

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