The Lag Structure of the Impact of Business Ownership on Economic Performance in OECD Countries

abstract

This paper investigates the impact of changes in the number of business owners on three measures of economic performance, viz. employment growth, GDP growth and labor productivity growth. Particular attention is devoted to the lag structure. The analysis is performed at the country level for 21 OECD countries. Our results confirm earlier evidence on three stages in the impact of entry on economic performance: an initial direct positive effect, followed by a negative effect due to exiting capacities and finally a stage of positive supply-side effects. The net effect is positive for employment and GDP growth. Changes in the number of business owners have no effect on labor productivity.

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Acknowledgements

Assistance of André van Stel and Viktor Stunnenberg (Erasmus University Rotterdam and Max Planck Institute, Jena) and comments by Rob van der Horst (EIM Business and Policy Research, Zoetermeer), Michael Fritsch (Technische Universiät Freiberg) and two anonymous referees are gratefully acknowledged. The paper has been written in the framework of the research program SCALES carried out by EIM Business and Policy Research in Zoetermeer and financed by the Dutch Ministry of Economic Affairs.

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Correspondence to A.R. Thurik.

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Carree, M., Thurik, A. The Lag Structure of the Impact of Business Ownership on Economic Performance in OECD Countries. Small Bus Econ 30, 101–110 (2008). https://doi.org/10.1007/s11187-006-9007-0

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Keywords

  • business ownership
  • entrepreneurship
  • economic growth
  • lag structure

JEL classifications:

  • L26
  • M13
  • O40