DOES THE INTERACTION BETWEEN ENTREPRENEURSHIP AND UNEMPLOYMENT EXIST?

Abstract

Foreign authors maintain (Faria, Cuestas, Mourelle, 2008; Parker, 2004) that entrepreneurship is one of the main life-force of modern economics growth, the fundamental task of which is to influence unemployment as much as possible. However, in practice, often consequences of unemployment prevent starting own business and is a problem for existing businesses. On the other hand, the unemployment can compel a person to start own business and in this way help him to evade unemployment risk.

The article analyses interaction between entrepreneurship and unemployment not only on the grounds of universally accepted effects of “Schumpeter“ and “Refugee“ but also stresses the importance of economical and cultural factors. The interaction between unemployment and entrepreneurship in Lithuania is analysed by using cross-correlation method. The analysis encompasses historical data during 1998-2007 years. Interdependence between three indications of entrepreneurship level and eight comparison economical indicators is assessed by using a lag of 4 years. Statistically meaningful interaction between entrepreneurship and unemployment in Lithuania was estimated (R2 = 0,4458) which, according to authors opinion, was determined by cultural factors such as differences in labour market, regional characteristics of the country and religion.