Abstract

The willingness of business people to take risks in the formation of new firms is rightly regarded as one of the principal characteristics of a market economy. As risk-takers, entrepreneurs drive innovation and introduce new products and technologies. Moreover, the processes of entry of new firms by entrepreneurs, which reallocate resources from low- to high-productivity uses, is pivotal to achieving efficiency, while the pressures of potential entry push existing firms to minimize their costs and prevent waste. Entrepreneurship is therefore seen as an indicator of national economic health, especially with respect to the ability to grow and to create jobs. Recently, better availability of data on entrepreneurial entry has enabled researchers to test hypotheses on the impact of economic growth on entrepreneurship and to find evidence supporting a positive relationship (Parker, 2009).