A County-Level Assessment of Entrepreneurship and Economic Growth in Appalachia using Simultaneous Equations
Maribel N. Mojica, Tesfa G. Gebremedhin, Peter V. Schaeffer
Research Paper #2009-4 / view paper (pp. 26, 179 K)
Abstract: This study provides evidence of the contribution of entrepreneurship to economic development in Appalachia. Using data on Appalachian counties, a system of simultaneous equations is empirically estimated to measure the effects of entrepreneurship on economic growth and development. We present an expanded Carlino-Mills growth model using changes in population, employment, and per capita income to represent growth. The goal of the investigation is to increase the understanding of entrepreneurship’s contributions to economic growth, and its potential as a development strategy for a region, such as Appalachia, that is characterized by poverty and underdevelopment. The results show that start-up businesses contribute significantly to determining population growth. Employment growth is positively affected by self-employment rates as well as by firm formation rates.

Constructing a Baseline Input-Output Model with Environmental Accounts (IOEA)
Taelim Choi, Randall W. Jackson, Nancey Green Leigh
Research Paper #2009-3 / view paper (pp. 25, 442 K)
Abstract: This paper reports our efforts to develop a baseline input-output model with environmental accounts for use in developing geographically specific e-waste recycling systems. We addressed the conceptual and practical issues that occurred when the recyclable end-of-life commodities and related activities were incorporated in the traditional input-output model: 1) existing industry and commodity accounts do not represent recycling activities and recyclable end-of-life products explicitly; 2) flows of end-of-life products are mainly observed in physical volume; 3) the price of end-of-life products is not unique in their transactions in general. Because of these issues, transactions of end-of-life products are not easily incorporated within the input-output framework. We provide a way to record transactions of end-of-life products in both physical and monetary terms in the input-output model with environmental accounts. Particularly, we presented a case of e-waste recycling for the Atlanta Metropolitan Area with a hypothetical scenario.  

An Empirical Analysis of the Link between Entrepreneurship and Economic Growth in West Virginia
Maribel N. Mojica, Tesfa G. Gebremedhin, Peter V. Schaeffer
Research Paper #2009-2 / view paper (pp. 21, 192 K)
Abstract: Entrepreneurship variables constructed from county-level proprietorship and firm birth data were included in an endogenous growth model to determine the relationship between entrepreneurship and economic growth in West Virginia.  The empirical estimates using weighted least squares (WLS) and 2-stage least squares (2SLS) regressions generally show empirical evidence regarding the positive contribution of entrepreneurial activity to economic growth.  Counties with more proprietors and business start ups exhibited higher growths in population and employment growth compared to less entrepreneurial counties.  However, none of the entrepreneurship variables used in the study is statistically significant in determining per capita income growth. 

Is Income Inequality Endogenous in Regional Growth?
Yohannes G. Hailu, Mulugeta S. Kahsai, Tesfa G. Gebremedhin, Randall W. Jackson
Research Paper #2009-1 / view paper (pp. 20, 180 K)
Abstract: This study focuses on testing the relationship between income inequality and growth within U.S. counties, and the channels through which such effects are observed. Based on a system of equations estimation, the empirical results confirm the hypotheses that income inequality has a growth dampening effect; income inequality is endogenous to regional growth and growth adjustment; and the channels through which income inequality determines growth are regional growth adjustments, such as migration and regional adjustment in job and income growth. Results have numerous policy implications to the extent that: (1) that income inequality is endogenous, its equilibrium level can be internally determined within a regional growth process; (2) traditional income inequality mitigating policies have indirect effect on overall regional growth, they may have unintended indirect effects on income inequality; and (3) regional growth adjustment also equilibrates income inequality, such forces can be utilized as policy instruments to mitigate income inequality, and its growth dampening effects hence forth.