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Entrepreneurship and Economic Development in a Developing Country

Author

Listed:
  • Sierdjan Koster

    (Post-Doctoral Researcher at the Urban and Regional Studies Institute, Faculty of Spatial Sciences, Groningen University, The Netherlands,)

  • Shailendra Kumar Rai

    (Assistant Professor at the Management Development Institute, Gurgaon, India.)

Abstract

This article analyses the possible link between entrepreneurship and economic development for the case of India. This link has been studied extensively for developed countries, but less so for developing countries. Using the GEM-model as a reference, we expect declining rates of entrepreneurship, as economic development opens up employment possibilities decreasing the number of necessity entrepreneurship. This pattern, however, is not found in the Indian case. Rather, entrepreneurship appears to be an important driver of recent economic growth. This can be explained by the fact that India is very much a service-based economy that facilitates small-scale firms. Although the level of entrepreneurship is increasing over time, the quality of the small firms remains rather stable; the share of registered firms remains equal over time. Given the importance of high-quality entrepreneurship for economic development, it seems that increasing the quality of entrepreneurship should be the main focus of policy measures.

Suggested Citation

  • Sierdjan Koster & Shailendra Kumar Rai, 2008. "Entrepreneurship and Economic Development in a Developing Country," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 17(2), pages 117-137, September.
    • Handle: RePEc:sae:jouent:v:17:y:2008:i:2:p:117-137
    DOI: 10.1177/097135570801700202
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    References listed on IDEAS

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    2. Sander Wennekers & André Stel & Roy Thurik & Paul Reynolds, 2008. "Nascent entrepreneurship and the level of economic development," Small Business Economics, Springer, vol. 30(3), pages 325-325, March.
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    Cited by:

    1. Sameer Lama & Hrikesh Bhandari, 2013. "Dynamics of Entrepreneurship: A Study on the Perception of Gen Y," International Journal of Reviews and Studies in Economics and Public Administration, National Statistics, vol. 1(1), pages 18-30, December.
    2. Folorunsho M. Ajide & Rufus A. Ajisafe & Olabode P. Olofin, 2019. "Capital Controls, Entrepreneurship and Economic Growth in Selected Developing Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(2), pages 191-212, February.
    3. Dambusse B. Libombo & Anabela Dinis, 2015. "Entrepreneurship Education In The Context Of Developing Countries: Study Of The Status And The Main Barriers In Mozambican Higher Education Institutions," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 20(03), pages 1-26, September.
    4. Imelda T. Angeles & Ma. Socorro P. Calara & Allan B. Guzman, 2019. "The mediating effect of microfinancing on access to finance and growth of microenterprises: evidence from the Philippines," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-16, December.
    5. repec:beo:journl:v:62:y:2018:i:216:p:111-130 is not listed on IDEAS
    6. Mohsen Mohammadi Khyareh, 2018. "Determinants Of Female Entrepreneurship In Iran: An Institutional Approach," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 63(216), pages 111-130, January –.

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