A Study of the Causal Relationship between Entrepreneurship and Unemployment in the Industrial Sector of Iran

Subject Areas : Business Management

Mohammad bager  Beheshti ¹ (Associate Professor and Faculty Member of Tabriz University)
Mohammad Hassan  Kheiravar ² (Master of Business Administration (MBA) and Ph.D. in Economics at the University of the Eastern Mediterranean)
Mohammad  Hassan Qazvinian ³ (Master of Science (Economics) - Consultant and Research Expert of Azerbaijan Industrial Management Organization)

Received: 2009-04-14 Accepted : 2009-12-04 Published : 2009-12-22

Keywords: entrepreneurship, Unemployment, Hissao&rsquo, s Causality Test,

Abstract :

Today, entrepreneurship is increasingly considered as an important tool of employment creation and unemployment reduction by economists and policymakers. Regarding the quality of this relationship, many ambiguities have become apparent in developed countries. Some studies indicate that there is a positive relationship between unemployment and entrepreneurship. In other words, this group of studies states that any increase in unemployment will lead to increase in entrepreneurial activities. However, other studies support the presence of a negative relationship between variables and state that any increase in entrepreneurial activities will reduce the unemployment rate. This paper investigates the relationship between unemployment and entrepreneurship in the manufacturing sector of the country. The empirical results indicate the existence of one distinct relationship between these two variables in which entrepreneurship negatively affects unemployment. JEL Ranking: L11, M13

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