Types of Entrepreneurship and Economic Growth

Abstract

In this paper, we empirically investigate the effect of entrepreneurship on economic growth at the country level. We use data from the Global Entrepreneurship Monitor, which provides comparative data on entrepreneurship from a wide range of countries. An important element of this paper is that we compare the effects of entrepreneurial activity on economic growth in high income, transition and low income countries. This dataset also enables us to make a distinction between the effects of entrepreneurship in general and growth-oriented entrepreneurship in particular. We present empirical tests of the impact of entrepreneurial activity on GDP growth over a four year period for a sample of 36 countries. Our empirical analyses suggest that entrepreneurship does not have an effect on economic growth in low income countries, in contrast to transition and high income countries where especially growth-oriented entrepreneurship seems to contribute strongly to macroeconomic growth.

The more business owners, the merrier? The role of tertiary education

“…By now, it is generally accepted that the contribution of entrepreneurship to macroeconomic development is contingent on the type of entrepreneurship (Dejardin and Fritsch 2011;Stam and Van Stel 2011). Examples of typologies of entrepreneurship are high-technology versus lowtechnology entrepreneurs, higher-versus lower-educated entrepreneurs, own-account workers versus employers, and necessity versus opportunity entrepreneurs.…”

The role of entrepreneurship in transforming efficiency economies into innovation-based economies

“…New firms, particularly those in transition economies, displace obsolete incumbents, fill existing market gaps and create new value (Stam & Stel 2009). Moreover, such entrepreneurial activities are found to be essential to commercialise innovative technologies and for healthy development of the business population (Stel et al 2005).…”

“…Entrepreneurship in efficiency-driven economies remains the major driver of economic growth (Stam & Stel 2009). If we consider the BRICS countries (Brazil, Russia, India, China, and South Africa), which, with the exception of India, are good representatives of efficiency-driven economies, entrepreneurial activities at small and medium business level are contributing a great deal to employment creation and the GDP.…”

“…Despite entrepreneurship in efficiency economies not being well-developed, we cannot repudiate its contribution to the economic development of those nations (Stam & Stel 2009). However, we contend that if such economies were cognisant enough about the challenges that entrepreneurs are facing and more able to provide a hospitable entrepreneurial environment, the contribution would have been much better than what we see today.…”

Entrepreneurship in Jordan: regional analysis and envisaged role

“…income, survival, and satisfaction), country-level (economic development and growth, employment, investment, wages, survival, innovation, exports, and productivity), and cross-country level. Again, some of these papers include Stam and Van Stel (2009), Thurik (2009), Naude (2008), Valliere and Peterson (2009), Braunerhjelm et al (2010, Martin et al (2010), Stam et al (2010), and many others.…”