Entrepreneurship and the business cycle: the “Schumpeter” effect versus the “refugee” effect—a French appraisal based on regional data

Abstract

International audienceWe study the influences of new-firm start-ups on growth at the regional and macroeconomic level in France using a quarterly database over the 1993–2011 period. We find that fluctuations in GDP are an early indicator of new-firm start-ups. Nevertheless, the most important relationships are found between the unemployment rate and new-firm start-ups. Entrepreneurship is mainly driven by an unemployment “push” effect that have consequences upon the potential of growth of new-firm start-ups in most of the French regions. The Île-de France region is an exception since the “Schumpeter” effect prevails in the long term

The role of entrepreneurship in transforming efficiency economies into innovation-based economies

“…Our result agrees with the many research works that explored the relationship between the two factors (Aubry et al 2015;Feki & Mnif 2016;Stel et al 2005;Yolaç 2015). As argued by Aubry et al (2015), fluctuations in GDP in developed countries could be an indicator of early entrepreneurial activities.…”

“…As a result, the contribution of entrepreneurial start-ups to economic growth is not as strong as it should be (Aubry et al 2015;Baptista & Thurik 2007), while, sadly, the relationship between entrepreneurial activity and economic development is negative (Acs et al 2008). …”

“…According to many research findings, it reveals variations in countries' domestic productivity and economic growth (Aubry et al 2015;Hashi & Krasniqi 2011;Stel et al 2005). …”

“…According to this line of research, promoting innovation creates a comfortable platform for the generation of opportunity entrepreneurs who will make a meaningful contribution to economic growth (Aubry et al 2015). In support of this claim, some suggest rechanneling entrepreneurship support programmes from necessity entrepreneurs to high-growth potential firms (Shane 2009) and encouraging policymakers to give due care to activities that help improve the quality of entrepreneurship and the emergence of ventures with strong growth prospects (Bruton et al 2015;Koster & Rai 2008).…”

“…The latter must be an integral part of the transformation endeavour and they must assume a leadership role (Aubry et al 2015). It is suggested that private firms must be prepared to develop the capabilities that would allow them to differentiate their offerings and focus on strategic leadership that could help them build the competencies and resources necessary to compete and respond to the changes that the transformation brings (González-Corzo 2015).…”