We study the cyclical pattern of entrepreneurial activity. Results across 22 OECD countries for the period 1972-2007 show that entrepreneurial activity is a leading indicator of the business cycle in a Granger-causality sense. This contradicts existing theoretical hypotheses which predict that entrepreneurship is pro-cyclical or not cyclical. We discuss the causes and implications of this finding which have immense policy relevance during the second economic crisis of the 21st century.

business cycle, entrepreneurship
Business Fluctuations; Cycles (jel E32), Entrepreneurship (jel L26)
Tinbergen Institute
hdl.handle.net/1765/15599
Tinbergen Institute Discussion Paper Series
Discussion paper / Tinbergen Institute
Tinbergen Institute

Koellinger, Ph.D, & Thurik, A.R. (2009). Entrepreneurship and the Business Cycle (No. TI 09-032/3). Discussion paper / Tinbergen Institute. Tinbergen Institute. Retrieved from http://hdl.handle.net/1765/15599