Institutional, Economic, and Socio-Economic Determinants of the Entrepreneurial Activity of Nations

Abstract

This empirical study analyses the effects of institutional, economic, and socio-economic determinants on total entrepreneurial activity in the contexts of developed and developing countries. It fills a gap in the literature, regarding the lack of empirical studies about the relationships among entrepreneurial activity, corruption, commercial freedom, economic growth, innovativeness, inward foreign direct investment, unemployment, households, and non-profit institutions serving households (NPISHs)’ final consumption expenditure, age dependency ratio, education index, and life expectancy at birth. The empirical application uses annual panel data for the 2003–2018 period, with a total sample of 21 countries, analysed in a two-stage empirical application, including preliminary analysis and a quantile regression model. New empirical evidence is provided, revealing a significantly positive role played by commercial freedom, innovativeness, inward foreign direct investment, households, and NPISHs’ final consumption expenditure and education on entrepreneurial activity. Corruption, unemployment, age dependency ratio, and life expectancy at birth have a significantly negative influence on entrepreneurial activity. In terms of implications, greater government control is recommended, in order to foster the quality of nations’ institutional environment. Additionally, suggested is the launch of new incentives to stimulate research and development activities aimed at registering international patents with a global impact, sourced from new ventures and transnational collaboration.

Institutional quality, unemployment, economic growth and entrepreneurial activity in developed countries: a dynamic and sustainable approach

“…Audretsch et al (2001) reported that the link between entrepreneurship activity and unemployment is treated in different ways and presents some ambiguity. In the same line of idea, Leitão and João (2021) support that the sign of this relationship is still ambiguous in the empirical and theoretical literature. Three different results can be reported on the basis of our literature review: there is a non-linear effect of unemployment on entrepreneurial activity exists; it is assimilated to a stimulator for self-employment independently of risks and uncertainty related to the AAE (Faria et al , 2009; Alam et al , 2020).…”

“…Corruption is an institutional and social phenomena with an extreme relevance and can affect performance if it is not efficiently controlled (Leitão and João, 2021). It translates an abuse of power for own private benefits (Anokhin and Schulze, 2009) and covers a variety of aspects such as economic, political and cultural (Tavares, 2004).…”

“…Here, they used "most," and this can allow us to assume that there are other factors, in addition to institutional quality and a combined approach, in this way that can be more beneficial. Leitão and João (2021) analyze the effect of institutional, socioeconomic and economic factors on total entrepreneurial activity in developing and developed countries. They RIBS 33,3 identified the existence of a significant positive effect of innovation, education and foreign direct investment added to the negative effect of corruption, age activity and unemployment, and they recommend that government control should increase to promote institutional quality.…”

The Role of Digital Transformation in the Relationship between Industrial Policies and Technological Innovation Performance: Evidence from the Listed Wind Power Enterprises in China

“…A country's industrial policies need to be coordinated with each other, so as to jointly improve social productivity and national innovation capacity and in order to improve its overall social welfare [37,38]. Based on the existing research, much evidence has also revealed the necessity of developing a new generation of public policies, aiming at the improvement of the quality of institutions and countries' institutional effectiveness [39,40].…”