In the specialized literature, entrepreneurship has been acknowledged to have a salient role in driving innovati on, economic growth, and welfare, in additi on to its eff ect on job creati on. Researchers have expressed diff erent views about the relati onship between economic development and entrepreneurship throughout ti me. It is also considered that innovati on is a driving force in the economic development of nati ons. Therefore, innovati ve entrepreneurship started to be considered a key factor in modern economic development. For instance, SMEs and innovati on lay at the core of the European Union's development strategy-Europe 2020 strategy. The aim of the arti cle is to analyze the role of innovati ve entrepreneurship in the economic development of EU member states. Taking into considerati on that both processes: economic development and innovati ve entrepreneurship are multi faceted, the arti cle comes to express the relati onship between the two phenomena and its specifi cs in EU member countries. Given the nature of contemporary highlights of the literature review and the stated research objecti ve, in this arti cle, a model was tested that captures the new or young and innovati ve fi rms, as aspects of innovati ve entrepreneurship and determinants of the economic growth rates. The research method used is regression model analysis. For the stati sti cal data analysis and processing, Stata and SPSS soft ware tools were used. The key fi ndings of the paper show that innovati ve entrepreneurs (being measured by the Total Early-stage Entrepreneurial Acti vity (TEA) innovati on level) are more present in countries with higher development levels and higher incomes, being moti vated by the improvement opportunity they see in becoming entrepreneurs. However, a higher degree of entrepreneurship, especially new fi rms' creati on, does not substanti ally contribute to accelerated economic development. This is explained by the variati on in the moti vati on (necessity or improvement oriented) entrepreneurs across EU countries.
Poor growth performance over the past decades in Europe has increased concerns for rising income discrepancies and social exclusion. European authorities have recently launched the Europe 2020 strategy which aims to improve social inclusion in Europe on top of already existing European regional policies aiming to reduce regional disparities through stimulating growth in areas where incomes are relatively low. While it is most common to confine measures of inequality to national borders, the existence of such union-wide objectives and policies motivates measuring income dispersion among all Europeans in this paper. Fiscal policy is a powerful tool that changes the distribution of income in either direction, up or down. In this context, the present paper reviews the evolution of income inequality in EU member countries and figures out how fiscal policy (direct taxes) has influenced these outcomes. The paper also examines the contributions of both tax and expenditure policies in reducing income inequality in the EU, highlighting fiscal policy’s impact in different EU member countries.
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