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

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

doi:10.1007/s00181-011-0516-6

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

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

Business Management

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Abstract

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 language	English
Pages (from-to)	1239-1261
Number of pages	23
Journal	Empirical Economics
Volume	43
Issue number	3
Early online date	8 Sept 2011
DOIs	https://doi.org/10.1007/s00181-011-0516-6
Publication status	Published - Dec 2012

Bibliographical note

Acknowledgements
This article has benefited from the comments and suggestions of the editor and two anonymous referees. The usual disclaimer applies. We also would like to thank José María Bravo, Silvestro Di Sanzo, Alicia Pérez, and Manuel E. Gegundez for helpful comments on earlier versions of the article.

Keywords

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

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abstract = "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.",

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AB - 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.

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

Abstract

Bibliographical note

Keywords

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