The dynamics of entrepreneurship: hysteresis, business cycles and government policy

Emilio Congregado, Antonio A. Golpe, Simon C. Parker

Research output: Contribution to journalArticle

74 Citations (Scopus)


This article estimates two unobserved components models to explore the macrodynamics of entrepreneurship in Spain and the USA. We ask whether entrepreneurship exhibits hysteresis, defined as a macrodynamic structure in which the cyclical component of entrepreneurship has persistent effects on the natural rate of entrepreneurship. We find evidence of hysteresis in Spain, but not the USA, while in Spain business cycle output variations significantly affect future rates of entrepreneurship. The article discusses implications of the findings for the design of entrepreneurship policies.
Original languageEnglish
Pages (from-to)1239-1261
Number of pages23
JournalEmpirical Economics
Issue number3
Early online date8 Sept 2011
Publication statusPublished - Dec 2012

Bibliographical note

This article has benefited from the comments and suggestions of the editor and two anonymous referees. The usual disclaimer applies. We also would like to thank José María Bravo, Silvestro Di Sanzo, Alicia Pérez, and Manuel E. Gegundez for helpful comments on earlier versions of the article.


  • hysteresis
  • unobserved components model
  • time series models
  • business cycles
  • self-employment
  • entrepreneurship


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