Does all entrepreneurship matter? The contribution of entrepreneurial activity to economic growth

Abstract

Purpose The purpose of this paper revisits the effect of entrepreneurship on economic growth. Design/methodology/approach Using a cross-country panel data set of 61 countries in the period 2002–2014, this paper empirically analyzes the differences in contribution to economic growth. Particularly, using an extension of the Cobb–Douglas production function, the authors show the role of entrepreneurship in developed and developing economies. Global entrepreneurship monitor data were used to estimate the proposed types of entrepreneurship. Findings Results indicate that economic growth can be explained by growth-oriented entrepreneurship, including developing economies. These results remain robust to a variety of specifications that include economic, social and cultural controls, and two ways of sorting countries by stage of development. Originality/value The authors split the total entrepreneurial activity (TEA) according to job expectations, in order to isolate the effect of entrepreneurial activity that is growth oriented (dynamic) and not (regular). Lastly, the empirical application presented comprises a more adequate timeframe to analyze the proposed relationship, determining possible differences for developed and developing economies.

Evaluation of the Global Entrepreneurship Index validity

“…Embora países menos desenvolvidos apresentem "estoques" de empreendedores maiores do que os mais desenvolvidos (Ács et al, 2014), a quantidade não representa qualidade, pois se trata de empreendedores orientados primordialmente pela necessidade (Autio & Fu, 2014;Lederman et al, 2014), com baixa visibilidade e/ou menos conhecidos do que os empreendedores inovadores. Por conta disso, eles têm mais dificuldades para acessar os mesmos recursos e fluxos de conhecimento detidos por um novo negócio inovador (Kantis et al, 2018;Ordeñana et al, 2019).…”

The Nexus between Digital Finance and Economic Development: Evidence from China

“…This study aims to examine the impact of digital finance on economic development in China, key control variables should be considered to control the influence of other factors on the dependent variable. Existing literature has listed substantial factors that affected economic development [57][58][59]; therefore, the following control variables were used: The Cobb-Douglas Production function is widely used in research on economic growth, and capital input and labor input are the two basic production factors. So, the logarithm of the total fixed assets of the whole society is used as the proxy variable of capital input (lnCAP), and the logarithm of labor force at year end is used to measure labor input (lnLAB) in this paper.…”

Islamic finance for entrepreneurship activities and economic growth: a parametric and non-parametric analysis from Malaysia

“…Similarly, Stulz (2000) demonstrated that economic growth depends on financial mechanisms that enable financial intermediaries to acquire specialized capital to the entrepreneurship domain. Above and beyond, by focusing only on the contribution of entrepreneurship to economic growth, entrepreneurship proved its key role in enhancing PRR economic growth according to Holcombe (1998), Stel et al (2005), Acs (2006), Galindo and Méndez-Picazo (2013), Adusei (2016) and Ordeñana et al (2019) when they demonstrated that entrepreneurship is an engine for achieving economic growth.…”