The Outlier Phenomenon in Entrepreneurship and Economic Growth: Mollycoddling Policies Create New Zealand's Perfect Storm

Analyzing GEM 2005 data, we confirm that entrepreneurship and economic development form a U-shaped curve. We seek to understand New Zealand's large deviation from the modeled curve by factor-analyzing all countries' deviations from the curve. We make recommendations that would move New Zealand toward the trend line and thus aid in increasing its level of economic development. Our findings indicate that measures that overprotect workers, spoil incentives, or indulge welfare passivity can stymie economic growth even in conditions of high entrepreneurial activity.

Keywords: Entrepreneurship

JEL Classification: M13

Suggested Citation: Suggested Citation

Frederick, Howard H. and Monsen, Erik Willard, The Outlier Phenomenon in Entrepreneurship and Economic Growth: Mollycoddling Policies Create New Zealand's Perfect Storm (January 21, 2009). Babson College Entrepreneurship Research Conference (BCERC) 2006, Frontiers of Entrepreneurship Research 2006, Available at SSRN: https://ssrn.com/abstract=1331092 or http://dx.doi.org/10.2139/ssrn.1331092