Entrepreneurship, Firm Dynamism, and Job Creation in Developing Countries: Does Resource Richness Matter?

This paper investigates the relationship between firm age, size, ownership and job creation and destruction, and whether these patterns differ across resource rich and non-resource rich countries. The paper finds that young firms have a higher net job creation rate. This result is robust irrespective of country grouping. The relationship between size and net job creation is positive but insignificant in both samples. Overall, these results underscore that age is a dependable predictor of job creation irrespective of country grouping. Further, small firms in resource rich countries do no exhibit higher gross job creation and destruction relative to large one, implying they are less dynamic. This could be as a result of higher regulatory costs which reduce firm flexibility by raising barriers to entry and exit.