Economic Expansions and Entrepreneurial Activity


Journal of Management Research

ISSN: 0972-5814 Online ISSN: 0974-455X

Economic Expansions and Entrepreneurial Activity


Halil Dincer Kaya


Abstract

Our objective in this study is to examine how the macroeconomy affects entrepreneurial activity. We look into how economic expansions affect the new or established business ownership rate, the informal investors rate, the nascent entrepreneurship rate, and necessity-driven entrepreneurial activity. We also examine how early-stage entrepreneurial activity for male and female  ntrepreneurs is affected by the macro-economy. Our results show that the informal investors rate goes up during prolonged expansionary periods. We also find that early-stage entrepreneurial activity for female entrepreneurs goes up during expansionary periods. However, we do not find any significant changes in the new or established business ownership rate, the nascent entrepreneurship rate, or necessity-driven entrepreneurial activity. Likewise, we do not find any significant changes in early-stage entrepreneurial activity for male entrepreneurs during periods of economic expansion. While our results do not support the “Recession Push” hypothesis, we find some evidence that supports the “Prosperity Pull” hypothesis.