An Empirical Analysis of the Link between Entrepreneurship and Economic Growth in West Virginia

Entrepreneurship variables constructed from county-level proprietorship and firm birth data were included in an endogenous growth model to determine the relationship between entrepreneurship and economic growth in West Virginia. The empirical estimates using weighted least squares (WLS) and 2-stage least squares (2SLS) regressions generally show empirical evidence regarding the positive contribution of entrepreneurial activity to economic growth. Counties with more proprietors and business start ups exhibited higher growths in population and employment growth compared to less entrepreneurial counties. However, none of the entrepreneurship variables used in the study is statistically significant in determining per capita income growth.