UNDERVALUATION AND NEW BUSINESS FORMATION IN DEVELOPING COUNTRIES

B. Mazorodze
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Abstract

The widespread recognition of new business formation as a facilitator of economic development has generated interest in examining its relevant determinants. In this paper, a rudimentary framework is proposed and empirically tested in which undervaluation of the real exchange rate incentivizes the establishment of new businesses. The goal of the paper is to establish the effect of real exchange rate undervaluation on the formation of new businesses. Using a broad sample of 40 developing countries observed between 2010 and 2018, results from a fixed effects Poisson model finds the evidence supportive of our hypothesis. The results particularly confirm a positive and sizeable effect of real exchange rate undervaluation on the number of newly registered businesses. Additionally, we find this positive effect stronger in countries with reliable energy, human capital, access to finance and efficient transport systems. These findings suggest that exchange rate policies that maintain undervalued exchange rates have an important bearing on business start-ups in developing countries and more so when accompanied by policy efforts to improve human capital, access to finance, efficient transport systems and the supply of reliable energy.
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发展中国家的价值低估和新业务的形成
人们普遍认识到新企业的形成是经济发展的推动者,这引起了人们对审查其相关决定因素的兴趣。本文提出了一个基本框架,并对其进行了实证检验,在这个框架中,实际汇率的低估激励了新企业的建立。本文的目的是建立实际汇率低估对新企业形成的影响。使用2010年至2018年间观察到的40个发展中国家的广泛样本,固定效应泊松模型的结果发现了支持我们假设的证据。结果特别证实了实际汇率低估对新注册企业数量的积极和相当大的影响。此外,我们发现,在拥有可靠能源、人力资本、融资渠道和高效交通系统的国家,这种积极效应更强。这些研究结果表明,维持低估汇率的汇率政策对发展中国家的初创企业有重要影响,如果辅以改善人力资本、融资渠道、有效运输系统和可靠能源供应的政策努力,则影响更大。
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来源期刊
CiteScore
2.10
自引率
0.00%
发文量
24
期刊介绍: The Journal of Developmental Entrepreneurship (JDE) provides a forum for the dissemination of descriptive, empirical, and theoretical research that focuses on issues concerning microenterprise and small business development, especially under conditions of adversity. The intended audiences for JDE are scholars who study issues of developmental entrepreneurship and professionals involved in governmental and non-governmental efforts to facilitate entrepreneurship in economic and community development programs around the world. Articles will cover a broad range of topics, including: -Entrepreneurship and self-employment in developing contexts -Challenges and opportunities unique to minority and women entrepreneurs -Microenterprise funds and private-sector small business lending practices -Legislation, regulation, and tax policy that impact entrepreneurship and economic development -Processes that facilitate growth and development within emerging enterprises -Networks within and among entrepreneurial ventures -Marketing patterns and approaches in venture growth and development -International developmental entrepreneurship programs -Entrepreneurship in the informal economic sector -Education and training for aspiring entrepreneurs -Industry practices that adversely affect microenterprise development -Economic and social impacts of microenterprise activity
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