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Fostering entrepreneurship: analyzing the influence of access to finance, innovation investment, educational attainment, infrastructure development, and regulatory environment

Author

Listed:
  • Mushab Rashid

    (Bahria University Islamabad)

  • Muhammad Khalid Anser

    (Recep Tayyip Erdoğan University)

  • Syed Tahir Hussain Shah

    (University of Wah)

  • Agha Amad Nabi

    (Government College University Hyderabad)

  • Ishfaq Ahmad

    (The University of Lahore)

  • Khalid Zaman

    (The University of Haripur)

Abstract

Entrepreneurship is essential for boosting economic growth, fostering innovation, and providing employment in emerging countries like Pakistan, where the middle class is still growing. Pakistan's entrepreneurship ecosystem has immense potential but faces significant challenges. The study examines the dynamics of entrepreneurship in Pakistan, identifying and addressing entrepreneur motivations essential to creating policies that stimulate new company startups and growth. The study explores how the regulatory environment, education, innovation investment, capital availability, and infrastructure development affected Pakistan's entrepreneurship from 1996Q1 to 2023Q4. The study uses the Autoregressive Distributed Lag model to detect short-term and long-term correlations in time-series data. Granger causality investigations examine how these traits affect entrepreneurship. Finally, the study examined the determinants' inter-temporal connections to determine their impact on entrepreneurship in the coming decade. The short-term results suggest that regulatory quality, research and development investment, and financial availability boost entrepreneurial activity. In contrast, meager income growth and inadequate education hinder entrepreneurship. Sustained investment fosters entrepreneurship, while low educational levels, limited infrastructure, and slow economic growth remain long-term barriers. Granger causality tests show that entrepreneurship and wealth development impact regulatory quality. Infrastructure improvements stimulate research and development expenditures, and the regulatory environment enhances education. Capital availability and educational attainment fuel research and development and infrastructure progress. The inter-temporal analysis predicts that the regulatory environment will have the greatest variation shock on entrepreneurial activity in the next decade, followed by education, finance, economic growth, industrial development, and research and development investment. The study concludes that concentrated reforms in education, infrastructure, financing, and regulation may boost entrepreneurial growth in the short and long term.

Suggested Citation

  • Mushab Rashid & Muhammad Khalid Anser & Syed Tahir Hussain Shah & Agha Amad Nabi & Ishfaq Ahmad & Khalid Zaman, 2025. "Fostering entrepreneurship: analyzing the influence of access to finance, innovation investment, educational attainment, infrastructure development, and regulatory environment," Future Business Journal, Springer, vol. 11(1), pages 1-21, December.
    • Handle: RePEc:spr:futbus:v:11:y:2025:i:1:d:10.1186_s43093-025-00557-z
    DOI: 10.1186/s43093-025-00557-z
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