Abstract
Purpose – This study aims to analyze the impact on human development of rates of innovative entrepreneurship and necessity entrepreneurship. Design/methodology/approach – Our empirical study is based on samples from countries with information about rates of entrepreneurship, human development, and social progress. The data are analyzed by means of pooled least squares and panel data techniques. Findings – Innovative entrepreneurship improves the quality of life in the dimensions measured by the Social Progress Index and Modified Human Development Index. Necessity entrepreneurship does not favor an increase of human development, at least in the dimensions measured by the two indexes, since this is a subsistence entrepreneurship type. Originality/value – This study presents new evidence that contributes to the knowledge on how entrepreneurship improves quality of life.
Highlights
Social science academics have historically been motivated to study entrepreneurship (Urbano, Aparicio, & Audretsch, 2018)
The findings suggests that innovative entrepreneurship has a positive effect on human development (HD), measured by the Social Progress Index (SPI), which is calculated based on 53 indicators classified into three dimensions of social progress: basic human needs, foundations of wellbeing, and opportunity
HDit = β0 + β1TEANECit + β2 IEFit + β3POPit + eit where i refers to the i-th transversal unit; t is time; HD is a variable measuring human development (SPI, Modified Human Development Index (MHDI)); Total Entrepreneurial Activity by Innovation (TEAIN) measures the rate of innovative entrepreneurial activity; Total Entrepreneurial Activity by Necessity (TEANEC) measures the rate of entrepreneurial activity by necessity; Index of Economic Freedom (IEF) measures economic freedom; and POP measures the population aged 15–64 years old
Summary
Social science academics have historically been motivated to study entrepreneurship (Urbano, Aparicio, & Audretsch, 2018). One important contribution is made by Gries and Naudé (2011), who proposed a theoretical framework that could relate entrepreneurship to HD based on the CA approach For these authors, entrepreneurship is a “functioning,” because it is the result of the economic or work activity in which people are involved. A literature review by Gries and Naudé (2011) concluded that few studies have been published about the impact of entrepreneurship on development beyond its contribution to economic growth, highlighting the need for evidence to address this gap. The main goal of this study is to present new evidence about the relationship between entrepreneurship and human development (HD) This analysis is carried out using the CA as the theoretical framework, which implies that to determine the effects. The final section concludes the paper with recommendations and policy implications
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