The Relationship Between Entrepreneurship and Economic Development: Is It U-Shaped?

The relationship between entrepreneurship and economic development: is it U-shaped?

Sander Wennekers André van Stel Martin Carree Roy Thurik

Zoetermeer, July 2009

This report is published under the SCALES-initiative (SCientific AnaLysis of Entrepreneurship and SMEs), as part of the 'SMEs and Entrepreneurship programme ' financed by the Netherlands Ministry of Economic Affairs.

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The relationship between entrepreneurship and economic development: is it U-shaped?
Sander Wennekersa, André van Stela, d, Martin Carreeb, and Roy Thurikc, a, e
EIM Business and Policy Research b Maastricht University c Erasmus University Rotterdam d University of Amsterdam e Max Planck Institute of Economics, Jena a Abstract: Following a centuries-long decline in the rate of self-employment, a remarkable discontinuity in this downward trend seems beyond doubt for many advanced economies starting in the 1970s and 80s. In some countries there is an ongoing revival of self-employment. At the same time, crosssectional analysis shows a U-shaped relationship between start-up rates of enterprise and levels of economic development. We provide an overview of the

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