Saeid Eisa Zade; Jahan Bakhsh Mehranfar; Mahdi Ferdosi
Volume 12, Issue 47 , January 2013, , Pages 153-174
Abstract
In this paper, we try to explain cross-country differences in the level of entrepreneurship using self-employment and innovation as proxy variables. For this purpose, we use a comparative approach to explore empirically the ways in which institutions have influenced self-employment and innovation. In ...
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In this paper, we try to explain cross-country differences in the level of entrepreneurship using self-employment and innovation as proxy variables. For this purpose, we use a comparative approach to explore empirically the ways in which institutions have influenced self-employment and innovation. In this paper, we make the assumption that national patent grants represent innovation and that national self-employment rates represent job replacement. Then, we investigate the relationship between the institutional setting, in terms of economic freedom measures, and entrepreneurship which is measured by proxy variables of self-employment and innovation in a panel data setting covering selected countries for the time-period of 1990-2009. The empirical findings show that indices of corruption perception, business freedom and trade freedom are negatively correlated with self-employment rate. On the other hand, investment freedom and freedom from government intervention have positive effect on self-employment. Interestingly, we found that institutional factors that determine self-employment and innovation may act in opposite directions: what encourages self-employment might discourage innovation and vice-versa.
Saeid Eisa Zade; Jahan Bakhsh Mehranfar
Volume 12, Issue 44 , April 2012, , Pages 199-212
Abstract
This paper investigates the relationship between the institutional setting, in terms of economic freedom, and entrepreneurship, as measured by self-employment in a panel data setting covering selected countries and the time-period 1990-2009. The measure of economic freedom includes five indices; size ...
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This paper investigates the relationship between the institutional setting, in terms of economic freedom, and entrepreneurship, as measured by self-employment in a panel data setting covering selected countries and the time-period 1990-2009. The measure of economic freedom includes five indices; size of government, the legal structure and security of property rights, access to sound money, the freedom of trade internationally, and the regulation of credit, labor and business. The empirical findings show that a small public sector, better legal structure and security of property rights tend to increase in entrepreneurship. Also, we find that the freedom of trade internationally and less regulation of credit, labor and business is negatively correlated to self-employment rate.
