Entrepreneurship in Peru: Evidence from Panel Data

In this paper, I studied occupational choice and financial deepening among households inCote d’Ivoire, particularly in the context of the relationship between wealth and education.My study is based on the occupational choice model established by Lloyd-Ellis and Bernhardt(2000) (hereafter LEB) and the financial deepening model of Greenwood and Jovanovic (1990)(hereafter GJ).In the most of empirical economic studies, space is rarely considered systematically, proba-bly because of the availability problem of geographical information and the lack of analyticalmethods. However, recent development of GIS (Geographical Information System) allows us tovisualize the economic data spatially and make it easier to create geographic analyses. Natu-rally, a lot of economic activities are based on the location of the agents. Hence it is importantto develop geographic analyses in order to obtain a better understanding of economic behavior.In this paper, I applied GIS analyses and it turned out that some of the major economic vari-ables show strong patterns depending on the geographic information and therefore confirmedthe importance of the geographic analyses.Basic empirical method employed in this paper is simple OLS regression estimation. As abenchmark result, OLS showed the better fit of the GJ model than the LEB in several alternativesof the choice of explanatory variables. Then by using GIS, some spatial variables are added, suchas the distance from major cities, major highways and dummy variables of regions. Interestingly,some of them showed significant correlation with the major economic variables of our interests,financial deepening and entrepreneurship. Here again, importance of the geographic analyses isconfirmed.