IESET.
Hypotheses·regulatory·business_dynamism_frontier_income_growth

Among high-income frontier economies 1980-2020, countries with higher business dynamism — measured by firm-entry rates, job- reallocation rates, and low incumbent-employment share — maintain stronger real income growth per capita than countries with low churn and high incumbent protection.

The pre-registered claim is that the top quartile of dynamism shows at least 0.4 percentage points higher annual real income growth than the bottom quartile, after controlling for initial income, education, and sectoral composition.

PARTIALengine/runs/business_dynamism_frontier_income_growth

PARTIAL — coef=-1.64e-05, p=0.217 (above α=0.05); direction inconclusive

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The evidence is suggestive but not decisive. coef=-1.64e-05, p=0.217 (above α=0.05); direction inconclusive

why it matters

This matters because regulatory claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 24 country or place units from 1980 to 2020, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Business dynamism composite
  • Job reallocation rate
What we checked
  • Real income per capita growth
  • Real gni per capita growth
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/business_dynamism_frontier_income_growth
1007550250198020002020USAGBRDEUFRAITAESPNLD
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show real_gdp_per_capita_growth across 24 sampled countries over 1980–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for business_dynamism_frontier_income_growth. Published chart will be generated from engine/runs/business_dynamism_frontier_income_growth/chart_data.json.

Who has skin in the game — schools predicting on this

3 schools list this hypothesis as a test of their position. The chips below are school-level scoreboard outcomes, not a second hypothesis verdict.

hypothesis verdict vs scoreboard outcome

The banner verdict judges this hypothesis as written. The scoreboard asks whether each school's polarity-corrected prediction was right. Raw status is not a school win: SUPPORTED supports schools that needed SUPPORTED, but refutes schools that needed REFUTED.

Austrian Business Cycle Theory (ABCT)wins if SUPPORTEDpartial/no-callClassical Liberalwins if SUPPORTEDpartial/no-callOrdoliberalism (Freiburg School)wins if SUPPORTEDpartial/no-call

Pre-registration

pre-registered
first-spec commit 5ce4495 · 2026-05-02T19:11:20Z
run generated · 2026-06-29T17:54:28Z

Among high-income frontier economies 1980-2020, countries with higher business dynamism — measured by firm-entry rates, job- reallocation rates, and low incumbent-employment share — maintain stronger real income growth per capita than countries with low churn and high incumbent protection. The pre-registered claim is that the top quartile of dynamism shows at least 0.4 percentage points higher annual real income growth than the bottom quartile, after controlling for initial income, education, and sectoral composition.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if (a) the panel-FE coefficient on the dynamism composite is not positive and significant at p<0.05, OR (b) the top-quartile vs bottom-quartile mean growth gap is below 0.3 pp/year, OR (c) the coefficient becomes insignificant or wrong- signed when US observations are dropped (indicating US-driven result). A developmentalist / incumbent-protection reading wins if high-churn countries show higher volatility but not higher mean growth.

formal test & threshold
test:      panel_fe_dynamism_composite_on_income_growth_with_quartile_robustness
threshold: panel_FE_beta(dynamism_composite) > 0 at p<0.05 AND top_quartile_mean_growth − bottom_quartile_mean_growth >= 0.4 pp/yr AND result robust to US exclusion at p<0.10

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
24 countries · 1980 – 2020
Evidence type
associational

Panel FE with quartile comparison robustness. Primary spec: regress real income growth on dynamism composite with country and year FE. Secondary: quartile-difference test (top vs bottom quartile of dynamism) on mean growth over 1980-2020. Robustness: drop US to avoid US-dominance; use only European sub-sample; alternative dynamism construction from OECD Entrepreneurship at a Glance.

Data

VariableSourceTransform
real_gdp_per_capita_growth
outcome
world_bank_wdi:NY.GDP.PCAP.KD.ZGtier 2
level
real_gni_per_capita_growth
outcome
world_bank_wdi:NY.GNP.PCAP.KD.ZGtier 2
level
business_dynamism_composite
treatment
constructed:0.4×firm_entry_rate + 0.4×job_reallocation_rate + 0.2×(1−incumbent_employment_share)tier 5
level
job_reallocation_rate
treatment
oecd_stan:job_reallocation_ratetier 5
level
firm_entry_rate
treatment
world_bank_wdi:IC.BUS.NREGtier 2
per_1000_working_age
log_initial_gdp_pc
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log
tertiary_enrollment_rate
control
world_bank_wdi:SE.TER.ENRRtier 2
level
services_share_gdp
control
world_bank_wdi:NV.SRV.TOTL.ZStier 2
level
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
union_density
control
ilo:union_density_ratetier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — business_dynamism_frontier_income_growth

Verdict: PARTIAL — coef=-1.64e-05, p=0.217 (above α=0.05); direction inconclusive

Pre-registration

  • Claim: Among high-income frontier economies 1980-2020, countries with higher business dynamism — measured by firm-entry rates, job- reallocation rates, and low incumbent-employment share — maintain stronger real income growth per capita than countries with low churn and high incumbent protection. The pre-registered claim is that the top quartile of dynamism shows at least 0.4 percentage points higher annual real income growth than the bottom quartile, after controlling for initial income, education, and sectoral composition.
  • Falsification rule: Not supported if (a) the panel-FE coefficient on the dynamism composite is not positive and significant at p<0.05, OR (b) the top-quartile vs bottom-quartile mean growth gap is below 0.3 pp/year, OR (c) the coefficient becomes insignificant or wrong- signed when US observations are dropped (indicating US-driven result). A developmentalist / incumbent-protection reading wins if high-churn countries show higher volatility but not higher mean growth.
  • Falsification test: panel_fe_dynamism_composite_on_income_growth_with_quartile_robustness

Estimate

  • Method: linearmodels.PanelOLS
  • Coefficient (treatment): -1.64e-05
  • Std error: 1.322e-05
  • p-value: 0.217
  • Observations: 213, countries: 19
  • Within R²: 0.2
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • world_bank_wdi:NY.GDP.PCAP.KD.ZG → real_gdp_per_capita_growth (outcome, publisher=world_bank_wdi, n=13897)
  • world_bank_wdi:NY.GNP.PCAP.KD.ZG → real_gni_per_capita_growth (outcome, publisher=world_bank_wdi, n=6614)
  • world_bank_wdi:IC.BUS.NREG → firm_entry_rate (treatment, publisher=world_bank_wdi, n=2370)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_initial_gdp_pc (controls, publisher=world_bank_wdi, n=12104)
  • world_bank_wdi:SE.TER.ENRR → tertiary_enrollment_rate (controls, publisher=world_bank_wdi, n=7217)
  • world_bank_wdi:NV.SRV.TOTL.ZS → services_share_gdp (controls, publisher=world_bank_wdi, n=10330)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)

Variables missing data

  • constructed: 0.4×firm_entry_rate + 0.4×job_reallocation_rate + 0.2×(1−incumbent_employment_share) (treatment, name=business_dynamism_composite) — vintage not on disk
  • oecd_stan:job_reallocation_rate (treatment, name=job_reallocation_rate) — vintage not on disk
  • ilo:union_density_rate (controls, name=union_density) — vintage not on disk

Generated by scripts/run_panel_fe.py at 2026-06-29T17:54:28+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

OECD DynEmp and BDS analogues are the preferred sources for job reallocation; where unavailable, Doing Business entry-density proxies are used with flagged coverage gaps.

Authored framework. Read the transparency note.