Entrepreneurship and Human Well-Being: A Study of Standard of Living and Quality of Life in Developing Countries

This study deepens the understanding of the relationship between entrepreneurship and national well-being by adopting Amartya Sen's capability approach, a fundamental and enlightening conceptual framework. It highlights the crucial distinction between opportunity entrepreneurship and necessity entrepreneurship by evaluating their respective effects on various dimensions of well-being. More specifically, this research rigorously analyzes how these two types of entrepreneurship influence national well-being, focusing on both disaggregated dimensions (standard of living and quality of life) and an aggregate measure of overall well-being and using a sample of 30 developing countries from 2004 to 2018 and the Generalized Method of Moments (GMM). The results reveal that opportunity entrepreneurship significantly improves both standards of living and quality of life, underscoring its positive contribution to societal well-being. In contrast, necessity entrepreneurship is associated with a reduced standard of living and has no statistically significant effect on quality of life. By clarifying the distinct roles of these two types of entrepreneurship at the national level, this study provides valuable insights for policymakers, enabling them to design targeted interventions that promote opportunity entrepreneurship while addressing the negative effects of necessity entrepreneurship. This novel contribution expands the understanding of national prosperity, going beyond traditional economic indicators to encompass broader measures of well-being.