Entrepreneurship, institutions and skills in low-income countries


Permanent URL for this page: http://hdl.voced.edu.au/10707/427294.

Author: Brixiova, Zuzana; Egert, Balazs


This paper develops a model of costly firm creation in an economy with weak institutions, costly business environment as well as skill gaps where one of the equilibrium outcomes is a low-productivity trap. The paper tests the implications of the model using a cross-sectional dataset including about 100 countries. Both theoretical and empirical results suggest that to move the economy into a productive equilibrium, complementarity matters: reforms to improve the business environment tend to be more effective in creating productive firms when accompanied by narrowing skill gaps. Similarly,...  [+] Show more

Subjects: Employment; Skills and knowledge; Policy; Governance; Performance; Economics; Industry

Keywords: Entrepreneurship; Self employment; Business; Education work relationship; Education and training system; Government role; Skill needs; Skill development; Skill shortage; Policy implications; Productivity; Economic factor

Published: Bonn, Germany: IZA, 2017

Physical description: 22 p.

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Series: IZA discussion paper; no. 10704

Resource type: Discussion paper

Document number: TD/TNC 128.261

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