In recent years, especially after the international financial crisis, the preoccupation of researchers and policy makers has shifted to identifying the most appropriate ways to relaunch economic growth and stimulate development. Previous research in the field emphasized the contribution of entrepreneurship to economic development, which is differentiated according to the level of development of countries, as well as the institutional and business environment specific to each country. Therefore, using panel data provided by the Global Entrepreneurship Monitor and World Bank for 21 European countries, over the 2002–2018 period, our paper proposes to investigate the impact of different types of entrepreneurship on economic growth.
Moreover, we analyze the contribution of entrepreneurship to economic growth according to level of development of countries and entrepreneurial motivations.
For measuring entrepreneurial activity, we use alternatively more indicators, respectively total early-stage entrepreneurial activity rate, nascent entrepreneurship rate, new business owners, and established business ownership rate. For motivation to become an entrepreneur, we use as a proxy the improvement-driven opportunity entrepreneurial activity rate and the necessity-driven entrepreneurial activity rate. The dependent variable of our models is economic growth measured by gross domestic product per capita. We take into consideration several macroeconomic variables as control variables. For testing our hypothesis, we use econometric analysis and we include descriptive statistics, correlation and regression models.
Our empirical estimations are in general in accordance with other empirical studies. Thus, we find a significant contribution brought by the entrepreneurial activity to economic growth, however, the impact of different forms of entrepreneurship on GDP is heterogeneous. Moreover, for the more developed countries, the role of entrepreneurship in enhancing economic growth is larger, compared to developing countries. We also found significant differences between countries with different levels of economic development as regards the impact of entrepreneurial motivations on economic growth.
The main conclusion is that the development of entrepreneurial activity is important for enhancing the economic growth of countries. Based on research, we formulate some recommendations for policymakers in order to support and encourage entrepreneurship to promote and consolidate economic growth.