Entrepreneur self-financing and economic growth

Working papers | 2006 | N 8

Abstract

The present study discusses the advantages and disadvantages of business self-financing from the perspective of business finance and then explores its macroeconomic consequences. Specifically, an Entrepreneurial Self-Financing Coefficient (EAC) has been calculated for a set of 15 OECD countries in the period 1970-2003. Through recent panel data techniques, the long-term effect of this variable on business investment, total factor productivity and product growth is studied. The results clearly suggest a positive and significant long-term relationship. Definitive version published in the magazine "Economics Ensayos" No. 47 - Year 2007