Economic complexity and entrepreneurship density: A non-linear effect study

Nguyen, Canh Phuc; Nguyen, Bach; Bui, Duy-Tung; Su, Thanh Dinh

doi:10.1016/j.techfore.2021.121107

Cited by 34 publications

(35 citation statements)

References 81 publications

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“…Economic complexity relates to the production capabilities of an economic system. It measures the knowledge accumulated by economic actors expressed in the production process (Hidalgo et al , 2007; Nguyen et al , 2021). The concept can be referred to the use of domestically based knowledge in the transformation of inputs into outputs including the diversification of goods and services in the country’s exportation system (Sepehrdoust et al , 2019).…”

Section: Overview Of Economic Complexity and Entrepreneurial Environm...mentioning

confidence: 99%

“…Entrepreneurial ecosystem and quality of product diversification provide opportunities for new industrial development in which a new set of entrepreneurs emerged (Felipe et al , 2012; Ivanova et al , 2017). In relation to this, the impact of economic complexity on the development of entrepreneurship may depend on the level of institutional framework of the economy (Nguyen et al , 2021). Apart from opportunities, Geroski (1990) and Scott et al (2017) explain that economic complexity may increase the level of economic uncertainties and further lead entrepreneurs to the frontier of what Schumpeter termed “creative destruction.” This study conducts a range of empirical tests to reveal the contribution of economic complexity to entrepreneurial development in Africa.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…A number of studies have examined the nexus between economic complexity and different economic variables, basically to understand national structural transformations process through product sophistications and export activities for national development (Du and O’Connor, 2019; Saadi, 2020; Adam et al , 2021). They suggest that economic complexity has important implications for national entrepreneurial development (Du and O’Connor, 2019; Nguyen et al , 2021). Despite this view, no study has ascertained the impact of economic complexity on entrepreneurial activities in Africa.…”

Section: Introductionmentioning

confidence: 99%

“…This leads to the demand for new products and services and further creates motivation of new firm entry (Ajide et al , 2021). It also creates another level of risk including competition with multiple new entrances (Nguyen et al , 2021). While this literature is still at developing stage, this paper examines this issue in the African region.…”

Section: Introductionmentioning

confidence: 99%

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Economic complexity and entrepreneurship: insights from Africa

Ajide

2022

IJDI

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Purpose Economic complexity reflects the nature of knowledge accumulated and technological capability of a nation. This study aims to evaluate the impact of economic complexity on entrepreneurship in selected African countries. Design/methodology/approach The study uses country’s level data of 18 countries covering a period of 2006–2017. Data are sourced from Massachusetts Institute of Technology’s Observatory of Economic Complexity database, World Bank’s Entrepreneurship Database and World Development indicators. To estimate models, the study uses panel-spatial correlation consistent, which is based on Driscoll and Kraay’s (1998) standard error, Method of Moments Panel Quantile regression proposed by Machado and Silva (2019) and instrumental variables estimation techniques. Findings The study’s findings are as follows. First, economic complexity improves entrepreneurship in Africa. Second, there is no evidence of nonlinear relationship between economic complexity and entrepreneurship for the case of African nations. The positive impact of economic complexity on entrepreneurship is persistent across all quantiles in the analysis. The empirical analysis suggests that the beneficial impact of African entrepreneurship is further strengthened by ethnic and religious diversity but reduced by weak political institutions. Originality/value This study stresses the role of economic complexity in the entrepreneurial activities. To the best of the authors’ knowledge, this is the first attempt to empirically provide insights on the important role of economic complexity on entrepreneurship in Africa.

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Section: Overview Of Economic Complexity and Entrepreneurial Environm...mentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Economic complexity and entrepreneurship: insights from Africa

Ajide

2022

IJDI

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“…The present analysis also pertains, to some extent, to the literature on the macroeconomic determinants of entrepreneurship (e.g., Audretsch et al 2022;Dutta and Meierrieks, 2021;Munemo, 2022;Nguyen et al 2021;Thai and Turkina, 2014).…”

Section: Introductionmentioning

confidence: 99%

Effect of AfT flows on Investment-Oriented Remittances flows

GNANGNON

2022

Preprint

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Despite the voluminous literature on the effect of Aid for Trade (AfT) flows on recipient countries' trade performance, little is known about the relationship between AfT flows and other capital flows to developing countries. This paper contributes to the literature by exploring the effect of AfT inflows on investment-oriented remittances inflows, notably through the channel of trade costs. Using an unbalanced panel dataset of 106 countries over the period 2002–2019, and the two-step system generalized method of moments, the empirical analysis has established several outcomes. AfT flows exert a positive effect on investment-oriented remittances flows, with the magnitude of this positive effect being higher in Least developed countries than in other countries, and in remittance-dependent countries. AfT flows stimulate investment-oriented remittances flows in countries that face higher trade costs. Finally, total AfT flows reduce investment-oriented remittances flows in countries that experience a higher volatility of the overall trade costs, but boost investment-oriented remittances in countries that improve the quality of trade measures. The analysis shows that AfT flows could be an important leverage for stimulating investment-oriented remittances flows, and promote the development of the private sector in beneficiary countries.

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The Moderating Roles of Economic Complexity in the Entrepreneurship‐Sustainable Environment Nexus for the Gulf Cooperation Council Economies

Dada,

Ajide,

Arnaut

et al. 2024

Int. J Fin Econ

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There are conflicting views on the effect of business and entrepreneurial activities on environmental degradation in developing economies. However, none of this study examines whether economic complexity can serve as a policy tool for mitigating the effect of entrepreneurial business activities on a sustainable environment. Economic complexity consists of the structural and economic transformation process from a simple production system to a more complex and innovation‐based one. It predicts the variations in income level and its impact on the choice of goods being produced in an economy. This study examines the moderating effect of economic complexity on the link between entrepreneurship and sustainable environment in Gulf Cooperation Council (GCC) countries from 2006 to 2020. It further examines the validity of the Entrepreneurial Environmental Kuznets Curve (EEKC). The study uses the Driscoll‐Kraay standard error fixed effect, Panels Corrected Standard Errors (PCSE), method of moment quantile regression and Dumitrescu–Hurlin causality that are robust to heteroscedasticity, cross‐sectional dependency and other pitfalls of least square estimating technique. The results validate the inverted U‐shaped EEKC hypothesis across all the quantiles. Economic complexity increases ecological degradation at the lower quantile levels, while it decreases environmental footprint at the upper quantiles. Furthermore, economic complexity moderates the detrimental impact of entrepreneurial activity on the environment at the higher quantiles. A two‐way relationship is established between entrepreneurial activity and the environment, while one one‐way connection from economic complexity to the environment was found. The study recommends that policymakers should encourage innovative rather than necessity entrepreneurs. Entrepreneurs should be encouraged to engage in business activities that are friendly toward preserving the ecological environment, and green innovative activities should be prioritised in their entrepreneurial activities.

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Economic complexity and entrepreneurship density: A non-linear effect study

Cited by 34 publications

References 81 publications

Economic complexity and entrepreneurship: insights from Africa

Economic complexity and entrepreneurship: insights from Africa

Effect of AfT flows on Investment-Oriented Remittances flows

The Moderating Roles of Economic Complexity in the Entrepreneurship‐Sustainable Environment Nexus for the Gulf Cooperation Council Economies

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