—The Global Entrepreneurship Monitor (GEM)
Report 2007 records that Thailand has a remarkably high
entrepreneurial activity, even if compared to Japan or the
United States. Many studies, including Schumpeter emphasized
the role of entrepreneurship in economic growth and
development of a country. Entrepreneurs, characterized by
their attitudes to be imaginative, innovative, authoritative, and
risk-taking, drive innovation and technological change in the
economy, which are crucial in economic growth and
development and lead to higher income of the population. On
the other hand, entrepreneurship has been considered to
associate with higher inequality because the risk embodied in it.
Although, during 1990 to 2002 poverty reduction in Thailand
has been claimed to be success but income inequality became
higher. This raise the question that in Thailand does
entrepreneurship cause poverty and inequality or poverty and
inequality cause entrepreneurship? Therefore, the aim of this
paper is to study the causal relationship between firm
establishment as proxy of entrepreneurship, income inequality
and poverty. Towards this ends, the analysis on the impact of
entrepreneurship on income of the poor, income inequality and
poverty are carried out by following the model of Beck et al.
This study uses data that are disaggregated into 76 provinces in
Thailand, The empirical analysis, based on panel data of
Thailand 76 provinces from 1997-2010. The results suggest that
firm establishments lead to increasing in number of poverty and
higher income inequality of Thai people.
—Causality, entrepreneurship, inequality,
Y. Muhammadsuhaimee is with the Faculty of Communication sciences,
Prince Of Songkla University, Pattani Campus, Pattani, 94000, Thailand
Cite:Muhammadsuhaimee Yanya, "Causal Relationship between Entrepreneurship Poverty and Income Inequality in Thailand," International Journal of Trade, Economics and Finance vol.3, no.6, pp. 436-440, 2012.