Miguel-Angel Galindo-Martín, María-Teresa Méndez-Picazo and María-Soledad Castaño-Martínez
Economic growth is one the most relevant economic objectives for policy makers. In order to determine the variables that enhance such an objective it is important to consider…
Abstract
Purpose
Economic growth is one the most relevant economic objectives for policy makers. In order to determine the variables that enhance such an objective it is important to consider different types of entrepreneurial activity. It is also necessary to consider the level of development and growth of a country to design the proper economic policy measures, given that entrepreneurship motivations and circumstances vary from country to country. Therefore, the purpose of this paper is to analyse the relationship between entrepreneurship and economic growth, including the role played by institutions and innovation considering two types of entrepreneurship (necessity and opportunity) and countries.
Design/methodology/approach
Data analysis of 31 countries with varying levels of growth and development yielded two large groups – either innovation-driven economies or efficiency-driven economies – following GEM classification based on the phases set out by the World Economic Forum. In order to test the hypotheses, a partial least squares analysis is carried out to show the existing relationships between the different variables, specifically: innovation, institutions, entrepreneurship and economic growth.
Findings
The empirical analysis used demonstrates that innovation positively affects economic growth and entrepreneurship. In addition, adequate functioning of institutions is shown to enhance economic growth and opportunity entrepreneurship. Finally, there is a positive relationship between entrepreneurship and economic growth.
Originality/value
Unlike other studies, different types of entrepreneurship (by necessity and opportunity) are essential to this analysis of the relationship between entrepreneurship and economic growth. The country sample was divided considering some country-specific structural circumstances. Neither aspect is considered in the literature and should be considered relevant for designing measures to enhance economic activity.
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Miguel‐Ángel Galindo and María‐Teresa Méndez‐Picazo
The main aim of this paper is to analyze the relationship between innovation and economic growth, following the Schumpeter approach, considering the entrepreneurship activity.
Abstract
Purpose
The main aim of this paper is to analyze the relationship between innovation and economic growth, following the Schumpeter approach, considering the entrepreneurship activity.
Design/methodology/approach
Several hypotheses are tested considering three equations, for the case of ten developed countries. To estimate the equations, generalized least square (GLS)‐cross‐section weights and panel least squares methodologies for the period 2001‐2009 have been used.
Findings
Innovation plays a central role in the economic growth process and the entrepreneur is the vehicle to introduce the new technologies to improve the firms' activity and to obtain higher profits. It is also necessary to include in this process other variables: social climate and the role of institutions.
Practical implications
Some measures can design from these results to improve innovation and entrepreneurship activity, which would have positive effects on economic growth.
Originality/value
Schumpeterian approach is developed for this analysis, and empirical estimations are carried out to test hypotheses on economic growth and innovation, considering not only the traditional quantitative variables but also qualitative ones, having a wider view about the process. Drucker statement on innovation effects on entrepreneurship activity is also tested.
Details
Keywords
María-Soledad Castaño-Martínez, María-Teresa Méndez-Picazo and Miguel-Ángel Galindo-Martín
The purpose of this paper is to analyse the effects of some political measures on entrepreneurship to promote economic growth and employment, specifically, R & D policies…
Abstract
Purpose
The purpose of this paper is to analyse the effects of some political measures on entrepreneurship to promote economic growth and employment, specifically, R & D policies, training, elimination of administrative barriers, access to finance support and promotion of entrepreneurial culture.
Design/methodology/approach
Seven hypotheses are tested developing a latent variables model with data from 13 European countries (Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden and UK) in 2012, using partial least squares estimation method.
Findings
Greater expenditure on R & D by governments and universities, public investment in education and measures to stimulate entrepreneurial culture have a positive effect on entrepreneurship. Furthermore, countries with complex legal systems which regulate the start-up of an economic activity and where access to credit is complicated, present lower levels of entrepreneurship. Societies with a greater number of innovative entrepreneurs present higher levels of entrepreneurial activity and economic performance. Finally, human capital and entrepreneurial activity positively affect economic performance in the case of the European countries studied in the sample.
Practical implications
The results obtained in the paper would facilitate the design of measures to stimulate to entrepreneurs and improve economic performance.
Originality/value
Several factors, qualitative and quantitative, have been considered in the analysis that they have not traditionally included in the analysis of the entrepreneurship behaviour taking into account the role played by the policy makers measures to improve such behaviour.