Title: Do public governance and the depth of financial intermediation impact the entrepreneurship–growth relationship?

Authors: Niranjan Chipalkatti, Meenakshi Rishi

Addresses: Albers School of Business and Economics, Seattle University, Seattle, WA 98122, USA. ' Albers School of Business and Economics, Seattle University, Seattle, WA 98122, USA

Abstract: The literature on entrepreneurship suggests that the impact of entrepreneurial activity on economic growth varies with the stage of economic development of a country. While entrepreneurial activity is positively associated with economic growth in rich countries, it has a negative effect poor countries. Our paper explores this implication by examining the association between entrepreneurial activity and economic growth for a sample of countries. Our econometric investigation suggests inadequate depth and development of the financial sector reduce the growth-enhancing impact of entrepreneurial activities. Surprisingly, the existence of corruption does not impede the beneficial impact of entrepreneurial activity on growth in our data set.

Keywords: entrepreneurship; economic growth; institutions; financial depth; economic development; entrepreneurial activity; corruption; econometrics; macroeconomic variables; institutional quality; credit markets.

DOI: 10.1504/IJSEI.2011.039812

International Journal of Social Entrepreneurship and Innovation, 2011 Vol.1 No.1, pp.55 - 65

Available online: 20 Apr 2011 *

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