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


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.

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Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School > Centre for Personal Financial Wellbeing
College of Business and Social Sciences > Aston Business School
Additional Information: © 2021, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Funding: University of Economics, Ho Chi Minh City, Vietnam.
Uncontrolled Keywords: Entrepreneurship,Economic Complexity,Structural changes,Non-Linear,Panel data
Publication ISSN: 1873-5509
Last Modified: 09 Apr 2024 07:24
Date Deposited: 12 Aug 2021 12:59
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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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