Poverty and Entrepreneurship in Developing Countries

José Ernesto Amorós and Oscar Cristi

in The Dynamics of Entrepreneurship

Published in print July 2011 | ISBN: 9780199580866
Published online September 2011 | e-ISBN: 9780191728716 | DOI:
Poverty and Entrepreneurship in Developing Countries

Show Summary Details


This chapter analyzes the relationship between poverty and entrepreneurship. Previous works have argued that only growth oriented entrepreneurs have a tangible effect on aggregate economic activity. The chapter complements these works by arguing that necessity entrepreneurship influences aggregate economic activity too, especially in developing countries. The chapter hypothesizes that lower per capita income and higher income inequality are positively associated to the number of people pursuing entrepreneurial activities because the latter helps to reduce poverty. The chapter tests the hypotheses using GEM data, the Human Development Index, and World Bank Governance Indicators. The results support our intuition and show that total and necessity early-stage entrepreneurship both have a positive effect on countries´ poverty reduction trends.

Keywords: entrepreneurship; entrepreneurial motivations; poverty; necessity entrepreneurship; early-stage entrepreneurship; Human Development Index; GEM; World Bank Governance Indicators

Chapter.  7781 words.  Illustrated.

Subjects: Innovation

Full text: subscription required

How to subscribe Recommend to my Librarian

Buy this work at Oxford University Press »

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.