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Determinants of Entrepreneurs' Activities: New Evidence from Cross-Country Data

In: Foreign Direct Investment and Small and Medium Enterprises Productivity and Access to Finance

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Abstract

This chapter provides an empirical investigation of the main determinants of entrepreneurial activities across three groups of countries over the period 2004–2008, by specifically examining the importance of institutional setting and economic growth on entrepreneurial activities. The classification of countries is based on the Economic Freedom Index and the World Economic Forum (2011) which groups them on the basis of whether they are innovation-driven, efficiencydriven, or factor-driven countries. On the one hand, empirical results find a positive and significant role for economic freedom to accelerate entrepreneurial activities and growth in innovation and efficiency-driven countries characterized by strong institutional systems. On the other hand, the results suggest that in factor-driven countries characterized by relatively less economic freedom and weak institutions, there is a significant negative relationship between economic freedom and entrepreneurial activities.

Suggested Citation

  • Doaa M. Salman, 2015. "Determinants of Entrepreneurs' Activities: New Evidence from Cross-Country Data," World Scientific Book Chapters, in: Khee Giap Tan & Kong Yam Tan (ed.), Foreign Direct Investment and Small and Medium Enterprises Productivity and Access to Finance, chapter 8, pages 145-160, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814678810_0008
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    1. Pekka Ilmakunnas & Vesa Kanniainen & Uki Lammi, "undated". "Entrepreneurship, Economic Risks, and Risk-Insurance in the Welfare State," EPRU Working Paper Series 99-03, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    2. Leora Klapper & Juan Manuel Quesada Delgado, 2007. "Entrepreneurship : New Data on Business Creation and How to Promote It," World Bank Publications - Reports 11163, The World Bank Group.
    3. Acs, Zoltán J & Audretsch, David B & Evans, David S, 1994. "Why Does the Self-Employment Rate Vary Across Countries and Over Time?," CEPR Discussion Papers 871, C.E.P.R. Discussion Papers.
    4. Héctor Salgado-Banda, 2005. "Entrepreneurship and Economic Growth: An Empirical Analysis," DEGIT Conference Papers c010_031, DEGIT, Dynamics, Economic Growth, and International Trade.
    5. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468, December.
    6. Audretsch,David B. & Thurik,Roy (ed.), 1999. "Innovation, Industry Evolution and Employment," Cambridge Books, Cambridge University Press, number 9780521641661, January.
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    Cited by:

    1. Hong, Sanghyun & Robert Reed, W. & Tian, Bifei & Wu, Tingting & Chen, Gen, 2021. "Does FDI promote entrepreneurial activities? A meta-analysis," World Development, Elsevier, vol. 142(C).

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    More about this item

    Keywords

    Foreign Direct Investment; The Spillover Effects; Small and Medium Enterprises; Regional Innovation; Entrepreneurial Activities; Trade and Investment; Bank Lending; Labor Productivity;
    All these keywords.

    JEL classification:

    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance

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