Impact of macro factors on country-level entrepreneurship: evidence from an empirical panel data study

Do national economic, social, and institutional conditions shape country-level entrepreneurship? While previous studies have explored this question, their findings remain inconsistent. Grounded in the Resource-Based View (RBV) and Transaction Cost Economics (TCE), this study examines the influence of 10 macro factors on entrepreneurship. Using panel data from the Global Entrepreneurship Monitor and the World Bank (2003–2019), covering 605 observations across 70 countries, the analysis employs a dynamic system GMM model. The results indicate that only four macro factors significantly affect country-level entrepreneurship, including: Economic Growth, Foreign Direct Investment (FDI), Economic Openness and Final Consumption Expenditure. This study contributes to entrepreneurship research by integrating RBV and TCE perspectives, demonstrating that economic resources strongly shape entrepreneurial activity at the macro level, while transaction costs associated with institutional barriers should be carefully considered by entrepreneurs in their decision-making. Additionally, the findings suggest policy implications for enhancing resource availability through promoting GDP growth, attracting FDI, selectively engaging in international trade, and implementing consumption-driven policies that benefit entrepreneurship.