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Entrepreneurship Dynamics: Assessing the Role of Macroeconomic Variables on New Business Density in Euro Area

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  • Lenka Vyrostková

    (Faculty of Mechanical Engineering, Technical University of Košice, Letná 9, 042 00 Košice, Slovakia)

  • Jaroslava Kádárová

    (Faculty of Mechanical Engineering, Technical University of Košice, Letná 9, 042 00 Košice, Slovakia)

Abstract

This article examines the impact of the macroenvironment on enterprises in euro-area countries over the period 2006–2020. Our study builds on important works and theories in the field of business, including the work of Kar and Özsahin. We employ the Panel Least Squares method to estimate the coefficient of selected variables. We identify political, institutional (government effectiveness index, regulatory quality index, rule of law, market capitalization of company, control of corruption, political stability and absence of violence) and financial (financial development index, gross domestic product, inflation rate, unemployment rate, public debt) determinants that can have an effect on entrepreneurship. The article aims to fill a gap in the existing literature by providing new insights from the Eurozone and updated data that were not included in previous literature reviews and studies. In this way, we contribute to expanding knowledge about the relationship between macroeconomic factors and entrepreneurial activities in this specific geographical area, considering the lack of current analyses. According to our results, there is a positive statistically significant relationship between entrepreneurship and gross domestic product per capita, regulatory quality index, and market capitalization of the company and a negative statistically significant relationship between entrepreneurship and rule of law, and public debt.

Suggested Citation

  • Lenka Vyrostková & Jaroslava Kádárová, 2023. "Entrepreneurship Dynamics: Assessing the Role of Macroeconomic Variables on New Business Density in Euro Area," IJFS, MDPI, vol. 11(4), pages 1-15, December.
    • Handle: RePEc:gam:jijfss:v:11:y:2023:i:4:p:139-:d:1292567
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    References listed on IDEAS

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    1. Vidal-Suñé, Antoni & López-Panisello, María-Belén, 2013. "Institutional and economic determinants of the perception of opportunities and entrepreneurial intention," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 26, pages 75-96.
    2. Bego�a Cueto & Mat�as Mayor & Patricia Su�rez, 2015. "Entrepreneurship and unemployment in Spain: a regional analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 22(15), pages 1230-1235, October.
    3. Gangaram Singh & Alex DeNoble, 2003. "Early Retirees As the Next Generation of Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 27(3), pages 207-226, July.
    4. Roy Thurik, 2003. "Entrepreneurship and Unemployment in the UK," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(3), pages 264-290, August.
    5. Wayne Long, 1983. "The Meaning of Entrepreneurship," Entrepreneurship Theory and Practice, , vol. 8(2), pages 47-59, October.
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