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

Emilio Congregado, Antonio A. Golpe, Simon C. Parker

Research output: Contribution to journalArticle

68 Citations (Scopus)


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.
Original languageEnglish
Pages (from-to)1239-1261
Number of pages23
JournalEmpirical Economics
Issue number3
Early online date8 Sep 2011
Publication statusPublished - Dec 2012


  • hysteresis
  • unobserved components model
  • time series models
  • business cycles
  • self-employment
  • entrepreneurship


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