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Entrepreneurship, economic growth, and innovation: Are feedback effects at work?

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  • Galindo, Miguel-Ángel
  • Méndez, María Teresa

Abstract

This study aims to analyze the relationships between entrepreneurship, innovation and economic growth, and to show the feedback effects in these relationships. A Schumpeterian approach considering three equations linking GDP, innovation, and entrepreneurship facilitates this analysis. This paper presents empirical analysis of entrepreneurial activity in 13 developed countries. Panel data with fixed effects methodology, for the period 2002 to 2007, provides the means to estimate the equations. The analysis shows that several factors have positive impacts on innovation and entrepreneurship, including monetary policy and social climate. Additionally, a feedback effect is at work: economic activity promotes entrepreneurship and innovation activities, and the latter enhances economic activity. Therefore, policymakers must consider this effect when designing economic policies.

Suggested Citation

  • Galindo, Miguel-Ángel & Méndez, María Teresa, 2014. "Entrepreneurship, economic growth, and innovation: Are feedback effects at work?," Journal of Business Research, Elsevier, vol. 67(5), pages 825-829.
  • Handle: RePEc:eee:jbrese:v:67:y:2014:i:5:p:825-829
    DOI: 10.1016/j.jbusres.2013.11.052
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    References listed on IDEAS

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    Cited by:

    1. Michael Adusei, 2016. "Does Entrepreneurship Promote Economic Growth in Africa?," African Development Review, African Development Bank, vol. 28(2), pages 201-214, June.
    2. Castaño, María-Soledad & Méndez, María-Teresa & Galindo, Miguel-Ángel, 2015. "The effect of social, cultural, and economic factors on entrepreneurship," Journal of Business Research, Elsevier, vol. 68(7), pages 1496-1500.
    3. Michele Cincera & Anabela Marques Santos, 2015. "Innovation and Access to Finance – A Review of the Literature," iCite Working Papers WP2015-16, ULB -- Universite Libre de Bruxelles.
    4. Michele Cincera & Anabela Santos, "undated". "Innovation and Access to Finance," IRMO Occasional Papers 6, Institute for Development and International Relations, Zagreb.
    5. Bhatt, Punita & Ahmad, Ali J. & Roomi, Muhammad Azam, 2016. "Social innovation with open source software: User engagement and development challenges in India," Technovation, Elsevier, vol. 52, pages 28-39.
    6. Mustafa Gerçeker & Bilal Özel & Ahmet Ay, 2014. "Effects of Entrepreneurship on Economic Growth in Turkey: An Empirical Analysis," Proceedings of International Academic Conferences 0702291, International Institute of Social and Economic Sciences.
    7. Aparicio, Sebastian & Urbano, David & Audretsch, David, 2016. "Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 45-61.
    8. Castaño, María Soledad & Méndez, María Teresa & Galindo, Miguel Ángel, 2016. "The effect of public policies on entrepreneurial activity and economic growth," Journal of Business Research, Elsevier, vol. 69(11), pages 5280-5285.
    9. Beynon, Malcolm & Jones, Paul & Pickernell, David, 2016. "Country-level investigation of innovation investment in manufacturing: Paired fsQCA of two models," Journal of Business Research, Elsevier, vol. 69(11), pages 5401-5407.
    10. Lavinia DOVLEAC & Marius BALASESCU & Simona BALASESCU, 2015. "The Perceptions Of Romanian Young Entrepreneurs Regarding The Challenges Of An Innovative Business Environment," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(1), pages 78-91, May.

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