Economic downturns and regional entrepreneurship dynamics in Mexico: trends and policy implications

Abstract

This article analyzes the role of the economic context determining the entrepreneurial outcomes at state level in Mexico during 2005-2019 and assesses the effects derived from downturns and their implications for employment. It is found that these effects depend on the type of venture, the states' entrepreneurial structures, the ventures' sensibility to the changes of the economic activity and the states' average venture size. To estimate the states' entrepreneurial and employment effects, panel data techniques are used. The results provide insights, not only on the determinants of entrepreneurship but on the relative and absolute impacts derived from economic downturns, bringing policy implications under the crisis context and to different policy purposes.