The impact of entrepreneurship on economic growth: GEM data analysis

Abstract

Purpose - Since the last decade of the 20th Century, the relation between entrepreneurship and economic performance have been discussed and empirically examined by various studies. Although the importance of the impact of entrepreneurship on economic performance have been studied empirically exclusively at the firm and industry level, country level contributions are rather short. Taking this deficiency into account, the aim of this study is to examine investigate the impact of entrepreneurial activities on economic growth at country level. Methodology - The empirical analysis of the study is modelled by consolidating entrepreneurship as an intermediate variable to the CobbDouglas growth model beside the basic variables of labour, gross capital formation, and gross domestic product per capita. The data of 35 countries covering 2006-2015 period is used in the study and the data is collected from OECD and Global Entrepreneurship Research Association databases. Findings - The results of the study produce that although the changes in the entrepreneurial variables don't effect economic growth immediately, they present a significant and positive effect in the long run. Conclusion - As the effect of entrepreneurial activities on economic growth come out in the long run, policies for entrepreneurship should be planned on a long-term basis.