• ISSN: 2010-023X
    • Frequency: Bimonthly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Executive Editor: Ms. Cherry L. Chen
    • Abstracting/ Indexing: Engineering & Technology Digital Library, ProQuest, Crossref, Electronic Journals Library, DOAJ , EBSCO, and Ulrich's Periodicals Directory
    • E-mail: ijtef@ejournal.net
IJTEF 2012 Vol.3(6): 436-440 ISSN: 2010-023X
DOI: 10.7763/IJTEF.2012.V3.241

Causal Relationship between Entrepreneurship Poverty and Income Inequality in Thailand

Muhammadsuhaimee Yanya
Abstract—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.

Index Terms—Causality, entrepreneurship, inequality, thailand.

Y. Muhammadsuhaimee is with the Faculty of Communication sciences, Prince Of Songkla University, Pattani Campus, Pattani, 94000, Thailand (e-mail: ymuhamma@bunga.pn.psu.ac.th).

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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.

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