New Business Creation, Economic Growth and Poverty in Nigeria

Abubakar Salisu Garba



The objective of the paper is to determine the effect of economic growth and poverty on new business creation. New business creation is seen as something good for the economy which takes different forms with varying degree of impact on country’s economic performance. Economic growth and poverty issues are highly essential in any socio-economic discourse. Understanding their influence on business creation could help in providing information on the nature of entrepreneurial activity in a country. The paper used time series data for 30 years in which vector autoregression (VAR) model was used for analysis. It is found that economic growth and poverty negatively affect new business creation but the null hypotheses that economic growth and poverty does not Granger caused new business creation are accepted. Most of the previous studies examined the influence of entrepreneurship on economic growth and there is paucity of research measuring the effect of poverty on entrepreneurship. It may be of interest to other researchers to find out why the relationship between poverty and business creation is not positive in some developing countries despite high incidence of poverty.


Business creation, Entrepreneurship, Economic growth, Poverty

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