Economic Policy Uncertainty and Entrepreneurship: A Bad for a Good?

Abstract

The study examines the influences of the global/domestic economic policy uncertainty (EPU) on entrepreneurship in a sample of 23 economies over the period 2006-2016. Employing the two-step system general method of moment (GMM) estimation for unbalanced panel data, our study provides surprising evidence indicating that EPU may not always be harmful to entrepreneurship. Precisely, in contrast with existing literature emphasizing the negative impact of the uncertainty on entrepreneurship, our article suggests that EPU seems to boost pro-entrepreneurial social and cultural norms (i.e., encouraging actions for creation of new businesses). As such, we suggest that uncertainty may serve as an exogenous shock filtering "good" business ventures from "not-so-good" ones.

Publication DOI: https://doi.org/10.1177/0971355720974819
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School
PURE Output Type: Article
Published Date: 2020-09-29
Accepted Date: 2020-09-29
Authors: Nguyen, Bach (ORCID Profile 0000-0003-1527-7443)
Schinckus, Christophe
Nguyen, Phuc Canh
Su, Dinh Thanh

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Version: Accepted Version

Access Restriction: Restricted to Repository staff only until 1 January 2050.


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