Do Innovation and Entrepreneurship Have Dominant Roles in Economic Growth? A New Perspective of Developed Countries

Abstract

Purpose of the study: The purpose of this paper is to analyze the potential causal link between innovation, entrepreneurship activity, and economic growth in the case of nine developed countries over the time-span ranging between 2001 and 2014. The research goal is to examine if the findings of this paper support the endogenous growth theory.
 Methodology: This paper has initially explored the stationary properties of the variables. Moreover, the causal links between the variables of interest have been investigated by estimating the panel VAR model (trivariate) employing the GMM framework. This paper also examines the potential causal linkage amid the variables of interest by employing the Granger causality test.
 Main Findings: Empirical results suggest that economic growth is found to Granger cause innovation and entrepreneurship activity. These findings emphasize the necessity to take both innovation and entrepreneurship while analyzing the determinants of economic growth since these are found to be interconnected and may play a critical role in the growth of the economy. These findings also support the endogenous growth.
 Applications of this study: Outcome of this paper is expected to provide significant insights for decision-makers to make a necessary effort not only to increase the start-up rates in developed countries but also to reduce the informal sector that is likely to occur as a result of start-ups in developing countries jeopardizing developed countries’ competitiveness.
 Novelty/Originality of this study: The first contribution of this study to the literature is the examination of cross-sectional dynamics of developed countries’ innovation, entrepreneurship, and economic growth. Secondly, these results indicate that entrepreneurial activity is a proximate cause and should be modelled as the channel through which innovation contributes to economic growth. Thirdly, the data used in this study are more comprehensive.

Waste-to-Renewable Energy Transition: Biogas Generation for Sustainable Development

“…Regression analysis was applied for the examination, and findings revealed that in comparison with the significant negative impact of conformity to rich villagers, conformity to relatives, neighbors, and village cadres all have a positive influence on households' willingness to adopt energy utilization of crop straw exampled by biogas (Zeng et al, 2019). In their work, Satrovic et al (2020) examined and found a positive and driving effect of innovation on economic development, which is expected to reduce environmental degradation.…”