Role of institution, government to robust international entrepreneurial activities and economic growth: New Evidence

Abstract

This paper contributes to the development of the field of international entrepreneurial activities by providing answers to the following questions. Is higher human development generates opportunities to entrepreneurial activities that yields economic growth? What is the effect of the level on economic development on the relationship between entrepreneurial activities and countries growth? Do economic policies generate opportunity that yields higher international entrepreneurial activities? The employed Generalized Method of Moments (GMM) estimation methodology is selected based on the long term dynamic of the entrepreneurial activities. Analysis is employed using panel data across two groups of countries based on their stage of development during the period 2004 - 2008. Empirical results provide a positive significant evidence for the role of human development to accelerate entrepreneurial activities and growth in innovative driven countries. The outcomes point towards the role of policies supporting entrepreneurial activities as a vital tool to accelerate development and growth via channels such as: better education levels, enhancing research and development, attractive taxes policies and stable monetary policy. This paper provides a comparative analysis of the empirical results and presents prospective explanations for the observed relationships between different groups of countries to study the dynamics of change with relative short time series.