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Drivers of Entrepreneurship: Linking with Economic Growth and Employment Generation (A Panel Data Analysis)

Author

Listed:
  • Farhat Rasool

    (Pakistan Institute of Development Economics, Islamabad)

  • Ahmed Gulzar

    (National Transport Research Centre (NTRC), Ministry of Communications and Research Scholar at Pakistan Institute of Development Economics (PIDE), Islamabad)

  • Shaheen Naseer

    (Pakistan Institute of Development Economics (PIDE), Islamabad.)

Abstract

The need for entrepreneurship for economic development has always been crucial in the history of successful nations and developed economies because entrepreneurs are the leaders who invent innovative ideas that give spark to economic activities. Entrepreneurship is a key determinant of sustainable growth in modern times. Mostly jobs are produced by small businesses started by entrepreneurial mind persons, many of them set up large companies. Entrepreneurship is frequently expressed in terms of higher self esteem, to exercise creative freedoms, and an overall greater sense of control over their own lives. Many economists and educators believe that these types of experienced entrepreneurs foster the robust entrepreneurial culture that exploit personal and communal economic and social success at sub-national, national, and international level. A strand of literature explains different categories of entrepreneurship, which are of paramount importance in explaining the economic growth, employment and population. The task of this study is to identify those factors along with the role of education, Research and Development activities which significantly explain the entrepreneurial potential and skills and at the second stage, to examine the impact of those entrepreneurial skills on economic growth and employment. To complete the task, micro panel data approach with different economic models and econometric estimation techniques (i.e. Stepwise Least Square with Forward Selection method and Pooled Least Square without random and fixed effects) is used. The panel data includes the observations on eight upper middle and lower middle income countries over the period ranging from 2005 to 2011.

Suggested Citation

  • Farhat Rasool & Ahmed Gulzar & Shaheen Naseer, 2012. "Drivers of Entrepreneurship: Linking with Economic Growth and Employment Generation (A Panel Data Analysis)," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(4), pages 587-606.
  • Handle: RePEc:pid:journl:v:51:y:2012:i:4:p:587-606
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    Keywords

    Drivers of Entrepreneurship; Economic Growth; Employment Generation; Institutions; Government Stability;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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