Economic Growth and Verdoorn's Law in the Spanish Regions, 1962-91

The aim of this paper is to analyse the interrelation between entrepreneurial capital and productive efficiency of the Spanish regions while verifying the importance that business dynamics and entrepreneurial activity have on regional economic growth. For this purpose, data are used from the seventeen Spanish regions during the period 2003−2016. A multi-equation model is estimated that enables the analysis, on the one hand, of the existence of a causal relationship between business dynamics and entrepreneurial activity and, on the other hand, of these variables on the total factor productivity. The results lead to the conclusion that the entrepreneurial activity and the net creation of companies have a positive effect on productive efficiency and can explain the differences in the economic growth of the regions. In addition, the stock of human capital, the promotion of innovation and the degree of technological innovation act as catalysts for the productive efficiency of the regions. Finally, the results verify the fulfilment of the Schumpeter effect by which entrepreneurial capital generates economic growth.

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Entrepreneurship, firms creation and regional performance

European Journal of Management and Business Economics ◽

10.1108/ejmbe-07-2018-0077 ◽

2019 ◽

Vol 28 (2) ◽

pp. 158-173 ◽

Cited By ~ 4

Author(s):

Paz Rico ◽

Bernardí Cabrer-Borrás

Keyword(s):

Economic Growth ◽

Human Capital ◽

Productive Efficiency ◽

Entrepreneurial Activity ◽

New Firms ◽

Content Type ◽

Spanish Regions ◽

Business Dynamics ◽

Technological Level ◽

The Creation

Purpose The purpose of this paper is to analyse if the divergences in the economic growth of the Spanish regions are a result of sectoral differences, company size or technological level of the new firms that emerge in the market. Design/methodology/approach For this purpose, a model is specified and estimated in which the total factor productivity of Spanish regions is explained by business dynamics, innovation, human capital and the level of entrepreneurship in each region. Findings The results obtained lead the authors to conclude that entrepreneurship understood as both the creation of new firms and entrepreneurial activity, have a positive effect on productive efficiency and can explain the differences in the economic growth of the regions. In addition, the stock of human capital and the promotion of innovation act as catalysts for the productive efficiency of the regions. However, the results show that it is not enough to generate new firms to boost economic growth; these businesses must also be oriented towards sectors that promote technological innovation and with the objective to reach an adequate size. Originality/value Empirical studies use either the creation of new firms or the index of entrepreneurial activity as alternative measures of entrepreneurship. In this research, however, both variables are considered together. Specifically, the creation of new companies is used as a measure of regional business dynamics, and the entrepreneurial activity index, provided by the Global Entrepreneurship Monitor, as a measure of regional entrepreneurship. The main novelty of this paper’s approach is that it considers different types of entrepreneurial capital in considering productive sector, size and technological level of the new companies.

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Economic growth and the balance-of-payments constraint: The case of the spanish regions, 1988–2009

Acta Oeconomica ◽

10.1556/032.65.2015.4.6 ◽

2015 ◽

Vol 65 (4) ◽

pp. 617-628 ◽

Cited By ~ 1

Author(s):

Oscar Bajo-Rubio ◽

Carmen Díaz-Roldán

Keyword(s):

Economic Growth ◽

Growth Rates ◽

Output Growth ◽

Balance Of Payments ◽

Regional Economies ◽

Spanish Regions ◽

Actual Growth

The balance-of-payments can act as a constraint on the rate of output growth, on putting a limit to the growth in the level of demand to which supply can adapt. Regional economies might be particularly sensitive to this effect, since they are presumably more integrated among them. In this paper, we examine this issue for the case of the 17 Spanish regions over the period 1988–2009, and calculate their balance-of-payments-constrained growth rates. By comparing these balance-of-payments-constrained growth rates with the actual growth rates, we would be able to assess whether the balance-of-payments has worked as a constraint on growth.

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