Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86183
Authors: 
Carree, Martin
van Stel, André
Thurik, Roy
Wennekers, Sander
Year of Publication: 
2007
Series/Report no.: 
Tinbergen Institute Discussion Paper 07-022/3
Abstract: 
This paper revisits the two-equation model of Carree, van Stel, Thurik and Wennekers (2002) where deviations from the ‘equilibrium’ rate of business ownership play a central role determining both the growth of business ownership and that of economic development. Two extensions of the original setup are addressed: using longer time series of averaged data of 23 OECD countries (up to 2004) we can discriminate between different functional forms of the ‘equilibrium’ rate and we allow for different penalties for being above or under the ‘equilibrium’ rate. The additional data do not provide evidence of a superior statistical fit of a U-shaped ‘equilibrium’ relationship when compared to an L-shaped one. There appears to be a growth penalty for having too few business owners but not so for having too many.
Subjects: 
entrepreneurship
economic development
economic growth
business ownership
JEL: 
L26
O10
Document Type: 
Working Paper

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