Economic Complexity and Entrepreneurship Density:A Non-Linear Effect Study

Abstract

This study examines the link between economic complexity and entrepreneurship density. Testing 53 economies over the period 2006-2016, we find a significant Granger causality from economic complexity to entrepreneurship density, but reverse causality is not supported. Also, we suggest that entrepreneurship density is an inverted-U shaped function of economic complexity. That is, an increase in economic complexity initially facilitates entrepreneurship density as more business opportunities are created. However, beyond a specific threshold, an increase in economic complexity induces higher risks and uncertainties, discouraging entrepreneurial activities. The results remain robust by different estimators and in sub-samples of High-Income Economies and Low-and-Middle-Income Economies.

Publication DOI: https://doi.org/10.1016/j.techfore.2021.121107
Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School
Additional Information: © 2021, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/ Funding: University of Economics, Ho Chi Minh City, Vietnam.
Uncontrolled Keywords: Entrepreneurship,Economic Complexity,Structural changes,Non-Linear,Panel data
Full Text Link:
Related URLs: https://www.sci ... 5400?via%3Dihub (Publisher URL)
PURE Output Type: Article
Published Date: 2021-12-21
Published Online Date: 2021-08-19
Accepted Date: 2021-08-08
Authors: Nguyen, Phuc Canh
Nguyen, Bach (ORCID Profile 0000-0003-1527-7443)
Bui, Tung
Su, Thanh

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Version: Accepted Version

Access Restriction: Restricted to Repository staff only until 19 February 2023.

License: Creative Commons Attribution Non-commercial No Derivatives


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