An empirical analysis of the relationship between entrepreneurship and income inequality

Does income inequality sand or grease the wheels of entrepreneurial activity? International evidence

“…For a smaller sample of 51 nations, Lecuna (2014) finds a positive relation between income inequality and entrepreneurship. On the other hand, Atems and Shand (2018) use state‐level U.S. data from 1989 to 2013 and, employing GMM estimation, find a positive relation between income inequality and entrepreneurship. The results across Chinese provinces, again using GMM estimation over 2003–2012, show the reverse (negative) effect of income inequality on entrepreneurship (Fan, Zhang, & Liu, 2016).…”

“…The importance of entrepreneurship in fueling economic growth has dawned on policymakers worldwide, yet identification of factors that are key drivers of entrepreneurship is far from complete. Researchers have considered numerous influences on entrepreneurship (Acs & Audretsch, 2005; Cebula, Hall, Mixon, & Payne, 2015; Goel & Saunoris, 2018, 2020), and some studies have considered the impact of income inequality on entrepreneurship (Atems & Shand, 2018; Halvarsson, Korpi, & Wennberg, 2018; Ragoubi & El Harbi, 2018). Income inequalities have been persistent in many nations of the world, despite government redistribution efforts.…”

Income inequality and entrepreneurship

“…However, after reaching a certain inequality threshold, this relationship becomes negative (an inverted U-shaped relationship between entrepreneurship and income inequality (Kuznets, 1995)). Atems and Shand (2018) also found a positive relationship between entrepreneurship and income inequality. Their results suggest that policies aiming to promote entrepreneurship increase inequality and may be detrimental to growth, which is consistent with Shane (2009).…”

“…Understanding inequality from the entrepreneurship point of view is very important because strong evidence suggests that income inequality slows economic growth (Atems, 2013). However, entrepreneurship and income inequality tend to move together (Atems & Shand, 2018), which generates a paradox: if entrepreneurship is expected to increase income inequality and income inequality is expected to decrease economic growth, then how can entrepreneurship encourage economic growth? Maybe we are missing something.…”

Türkiye de Bölgelerarası Sektörel Verimliliğin Analizi - The Analysis of Interregional Sectoral Productivity in Turkey

“…Particularly income, the measurement of the distribution of wealth and the welfare losses are predominant in the studies carried out. Some examples of international literature are: Robinson et al, 1985;Braun, 1988;Jordá and Fullerton, 2005;Jordá and Sarabia, 2015;Sun et al, 2015;Du et al, 2015;Lakner and Milanovic, 2016;Ravallion, 2017;Atems and Shand, 2018. Some examples of national literature are: Limanlı and Yamak, 2014;Çiftçi, 2015a, 2015b The location coefficient is the most widely used statistical method for evaluating sectoral Specialisation among regions, which was developed by Florence in 1939 (Figueiredo et al, 2009, p. 856) This coefficient measures the accumulation of employment in any sector or measure relative to other regional units.…”