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Empirical analysis of the impact of entrepreneurial activity on economic growth of Global Entrepreneurship Monitor (GEM) countries

Author

Listed:
  • Sue Abdinnour

    (Wichita State University)

  • Sesan Oluseyi Adeniji

    (Wichita State University)

Abstract

This study conducted a practical examination of how entrepreneurial endeavors influence economic expansion by utilizing data from the Global Entrepreneurship Monitor (GEM) from 2001 to 2021 in 23 participating countries. Real Gross Domestic Product Per Capita (RGDPPC) represented economic expansion, while Established Business Ownership (EBO), High Job Creation Expectation (HJCE), and Total Early-Stage Entrepreneurship Activity (TEA) symbolized entrepreneurial endeavor. The interplay between EBO, TEA, and the National Entrepreneurship Context Index (NECI) was also assessed. The panel autoregressive distributed lag (ARDL) model was implemented after panel stationarity tests and co-movement analysis. Results reveal that TEA exerts no immediate short-term impact on economic growth, with long-term effects being contingent on short-term homogeneity or heterogeneity. The impact on the intended outcome was adverse in both the near and distant time frames for businesses that were already established, yet demonstrated a favorable lagged influence. High job creation expectations had a short-term adverse outcome on real per capita GDP expansion, yet a favorable impact over an extended duration. The inclusion of NECI indicated a significant influence regarding the correlation among entrepreneurial elements and real per capita GDP. Thus, the immediate effect of entrepreneurial activities on growth is not significant or positive, but over time, the impact becomes noticeable with sustained effort.

Suggested Citation

  • Sue Abdinnour & Sesan Oluseyi Adeniji, 2023. "Empirical analysis of the impact of entrepreneurial activity on economic growth of Global Entrepreneurship Monitor (GEM) countries," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 13(1), pages 1-11, December.
    • Handle: RePEc:spr:jglont:v:13:y:2023:i:1:d:10.1007_s40497-023-00355-3
    DOI: 10.1007/s40497-023-00355-3
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    More about this item

    Keywords

    Entrepreneurial activity; NECI; GEM data; Economic growth; Panel ARDL;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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