Entry rates have a negative long-run effect on US regional growth, which contradicts innovation-based growth models. This puzzle is resolved when a model-consistent specification is estimated using per capita entry growth. Evidence supports the Schumpeterian hypothesis of a positive relationship between exit and economic growth.

Additional Metadata
Publisher Department of Economics
Series Carleton Economic Papers
Casares, M., & Khan, H.U. (2014). Entry, Exit and Economic Growth: US Regional Evidence (No. CEP 14-08). Carleton Economic Papers. Department of Economics.