عنوان انگلیسی مقاله:

Entrepreneurship and political risk

ترجمه عنوان مقاله: کارآفرینی و ریسک سیاسی

رشته: کارآفرینی

سال انتشار: 2013

تعداد صفحات مقاله انگلیسی: 15 صفحه

منبع: Emerald

نوع فایل: pdf

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چکیده مقاله

Purpose: Previous literature has clearly demonstrated the need for sound government policies or “institutions” to promote and support entrepreneurship in a country. The purpose of this paper is to explore the role of one such institution – political stability – in boosting entrepreneurial endeavors. A politically stable nation will have lower risk and transaction/contracting costs, and higher levels of government transparency, predictability, and accountability. Thus, the paper should expect that with greater political stability there should be a greater degree of entrepreneurial activity.

Design/methodology/approach: Using dynamic panel estimators (System GMM estimators) and considering multiple proxies of political risk, our results confirm this hypothesis. Such estimators handle challenges associated with panel data efficiently.

Findings: The paper’s results show that greater political stability for a country does indeed lead to an increased rate of entrepreneurship and wealth creation.

Originality/value: Entrepreneurship is critical to the process of economic growth and development. To prosper, countries must unleash the creative talents of their citizens through the decentralized process of formal private sector entrepreneurship. New legal businesses create jobs, opportunities, wealth, and goods and services that make a nation grow. Sadly in many nations, this process is stifled and poverty is the result. While previous research has examined which types of specific policies matter for promoting entrepreneurship, the paper considers the different question of how the stability of political institutions impacts the rate of entrepreneurship.

Keywords: Entrepreneurs, Development, Economic growth

مقدمه مقاله

The development literature has stressed the lack of political stability as a major impediment to the economic growth and development of a nation (Aisen and Veiga, 2006; Jong-a-Pin, 2009; Alesina and Perotti, 1996; Levine and Renelt, 1992; Barro,  1996). Many studies have found that higher levels of socio-political instability lower investment and lead to inflation (Alesina and Perotti, 1996; Aisen and Veiga, 2006).

Financial institutions and specifically, financial development are also negatively affected by political instability (Roe and Siegel, 2011). In this paper, we test the effect of political stability on entrepreneurship rates in countries. Political instability leads to greater risk and uncertainty in contracting, applications of legal rules, the structure of property rights, and tax/expenditure policies. On the other hand, stable and sound institutions reduce transaction costs and, thus allow individuals to capture the gains from exchange in market transactions (Boettke and Coyne, 2003, 2006).

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