The Impact of the Global Crisis on Entrepreneurial Activity
The Impact of the Global Crisis on Entrepreneurial Activity

Summary/Abstract: We examine the impact of the 2008-2009 Global Crisis on entrepreneurial activity. We use the Global Entrepreneurship Monitor (i.e. GEM) dataset. We look into how the crisis affected new or established business ownership rate, improvement-driven opportunity entrepreneurial activity, informal investors rate, nascent entrepreneurship rate, and necessity-driven entrepreneurial activity. We also examine how early-stage entrepreneurial activity for male and female entrepreneurs are affected by the macro-economy. Our results show that informal investors rate (i.e. percentage of 18-64 population who have personally provided funds for a new business, started by someone else, in the past three years) went up significantly after the crisis. On the other hand, we do not find any significant change in new or established business ownership rate, improvement driven opportunity entrepreneurial activity, nascent entrepreneurship rate, and necessity-driven entrepreneurial activity. Likewise, we do not find any significant change in early-stage entrepreneurial activity for male or female entrepreneurs after the crisis. Our results reject the “Prosperity Pull” hypothesis and only partially supports the “Recession Push” hypothesis.

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