Entrepreneurship in the industrial sector, economic growth and employment by using the SUR and SVAR methods

The present study investigates the relationship between entrepreneurship in industrial sector, economic growth and employment rate in the Iranian economy, using the vector Auto-regressive model, using the Seemingly Unrelated Regression method and short-run Structural Vector Auto-Regressive model. According to the dependence of the Iranian economy on oil exports, sanctions and fluctuations in oil price in recent years have reduced economic growth in Iran. Entrepreneurship in the industry according to the young population of Iran, can lead to increase capacity in manufacturing sector, which in turn can have a positive impact on increasing non-oil exports and reduce the dependence of the Iranian economy on oil revenue. After estimating the model using annual data from 1959 to 2016, the results show that entrepreneurship in industrial sector has a positive effect on economic growth with six lag periods and employment rate with five lag periods in Iranian economy. Therefore, entrepreneurship can have a positive effect on employment and economic growth if new businesses are created for successive periods and not closed for at least six years. Employment rate has a positive effect on entrepreneurship in the industrial sector and economic growth with two lag periods. The results for the short-run SVAR pattern reflect the positive effect of economic growth on employment. Therefore, increasing economic growth can have a positive effect on employment rate in the current period.