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Does entrepreneurship reduce poverty in developing countries?

Author

Listed:
  • Komivi Afawubo

    (CEREFIGE EA3942, University of Lorraine)

  • Yawo A. Noglo

    (Paris Nanterre University, France/INSEEC MSc & MBA, Paris/CAP-Afriques, UQAM, Canada)

Abstract

This paper examines whether entrepreneurship proxies by Total Entrepreneurial Activity (TEA) reduces poverty in 122 developing countries over the period 2006-2016. We use three measures of poverty Poverty gap at $1.90 a day (2011 PPP) (%), Poverty headcount ratio at $1.90 a day (2011 PPP) (% of population) and Poverty gap at national poverty lines (%). Our results suggest that the TEA has a significant and negative impact on all measures of poverty. The picture remains similar when the countries are dispatched by levels of income. However, when we consider the 2008's financial crisis effect, the impact of TEA on poverty reduction over the period 2009-2016 is lower compared to that of the full period (2006-2016). The focus of developing countries' policy makers should be concerned the creation of more entrepreneurs and enterprises in a rule of law enhancing and property right secured framework with a skillful workforce.

Suggested Citation

  • Komivi Afawubo & Yawo A. Noglo, 2021. "Does entrepreneurship reduce poverty in developing countries?," Economics Bulletin, AccessEcon, vol. 41(4), pages 2657-2675.
    • Handle: RePEc:ebl:ecbull:eb-21-00012
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    More about this item

    Keywords

    Entrepreneurship; Poverty; Developing countries; Panel Data Models;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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