Do government private subsidies crowd out entrepreneurship?

Abstract

 Although several studies have found a negative relationship between government spending and entrepreneurship, much debate remains regarding the components of government spending responsible for this association. We contribute to the literature by specifically exploring the relationship between government private subsidies and entrepreneurship. By combining macro-economic government spending data with individual level entrepreneurship data, we find a negative association between the share of private subsidies and entrepreneurship. However, findings are less straightforward when we delve deeper into the components of private subsidies and its association with different kinds of entrepreneurship.