Entrepreneurship and economic growth in emerging markets: An empirical analysis

Abstract

Policy makers must identify the priorities in which resources should be invested in order to stimulate growth. This requires the identification of drivers of economic growth. Numerous researchers have pointed out that entrepreneurship is one of the key drivers of growth in the developed countries. However, sometimes entrepreneurship can be “unproductive”, and even “destructive”, because different forms of entrepreneurship do not have the same impact. Our paper investigates the impact of different types of entrepreneurships on growth in the emerging markets in order to identify the productive forms of entrepreneurship. The regression results, from panel data analysis of 20 emerging countries for the period of 2011–2018, showed that total entrepreneurial activity has a positive impact on economic growth in the emerging markets, but this impact is not statistically significant. The greatest and significant contribution to economic growth has high-growth expectation entrepreneurship. The influence of innovative entrepreneurship on economic growth is positive, but statistically insignificant, while impact of necessity-driven entrepreneurship is negative. Necessity-driven entrepreneurship and informal entrepreneurship are unproductive and destructive forms of entrepreneurship in the emerging markets.