Entrepreneurship and Economic Growth: A Cross-Sectional Analysis Perspective

Jungsuk Kim (), Cynthia Castillejos-Petalcorin (), Yothin Jinjarak, Donghyun Park, Pilipinas Quising () and Shu Tian ()
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Jungsuk Kim: Sejong University
Cynthia Castillejos-Petalcorin: Asian Development Bank
Pilipinas Quising: Asian Development Bank
Shu Tian: Asian Development Bank

No 672, ADB Economics Working Paper Series from Asian Development Bank

Abstract: Entrepreneurship, or the activity of starting and running a business, is a vital ingredient of economic growth and development. Entrepreneurs contribute to innovation, and they are central to dynamic Schumpeterian competition and broader economic dynamism. In this paper, we contribute to the entrepreneurship literature by performing cross-sectional analysis to examine the link between entrepreneurship and economic growth. We divide total early-stage entrepreneurship into opportunity-driven entrepreneurship versus necessitydriven entrepreneurship, and our sample economies into advanced economies versus developing economies. We do not find evidence of a positive link between aggregate entrepreneurship and economic growth. This is consistent with the hugely heterogenous nature of entrepreneurial activity. At a broader level, our empirical evidence points to the importance of distinguishing between different types of entrepreneurship and different groups of economies. In particular, for developing economies where manufacturing is relatively important, we find that opportunity-driven entrepreneurship is positively linked with growth.

Keywords: entrepreneurship; economic growth; development (search for similar items in EconPapers)
JEL-codes: L26 M13 O47 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2022-10-11
New Economics Papers: this item is included in nep-ent, nep-gro and nep-sbm
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