The effect of entrepreneurship on growth, income inequality and poverty in Thailand

• Main Author: Yanya, Muhammadsuhaimee
• Format: Thesis
• Language: English; English
• Published: 2015
• Subjects: HB615-715 Entrepreneurship. Risk and uncertainty. Property
• Online Access: http://etd.uum.edu.my/5751/

Entrepreneurship has been argued to play a key role in economic development. In this regard, Thailand has recorded remarkably high entrepreneurial activities compared to other Asian countries. Paradoxically, Thailand’s economic development in terms of growth, poverty and inequality has been relatively dismal compared to other Asian countries. Accordingly, these observations cast doubts on the role of entrepreneurship in economic development in Thailand. Therefore, the objective of this study is to investigate the impact of entrepreneurship on growth, poverty and inequality in Thailand. This study employs the growth regression model to investigate the relationship between entrepreneurship and growth. In addition, this study employs the inequality and poverty regression model to investigate the relationship between entrepreneurship and poverty, and between entrepreneurship and inequality. Besides, to ascertain the causality direction between entrepreneurship and growth, this study employs the Granger Causality test. This study uses the panel data for 76 provinces in Thailand covering the period 1997–2008. The results of the study show that entrepreneurship has a significantly positive impact on economic growth in Thailand. Entrepreneurship also is found to have a negative significant impact on poverty. However, the study fails to find evidence on the impact of entrepreneurship on income inequality and income of the poor. Furthermore, the Granger Causality test shows that entrepreneurship Granger-causes growth but not vice versa. Overall, the results imply that while entrepreneurship has a favorable effect on individuals as a whole, the benefits of entrepreneurship appear to accrue more to the non-poor individuals. Therefore, it is imperative that the policy- makers review the existing policies and strategies with regard to entrepreneurship development in Thailand.