Entrepreneurship, competitiveness and economic growth: empirical evidence

Abstract

Despite the growing interest in developing research on entrepreneurship, the relationship between competitiveness and economic growth has been little explored. This paper shows the relationship between entrepreneurship and competitiveness. The aim of this study is to analyze total entrepreneurial activity - TEA, measured by the Global Entrepreneurship Monitor [GEM], evaluating the variables that have significant relevance in explaining entrepreneurship. The data were collected in 64 countries for the year 2007. This paper considers two econometric models obtained by the least-squares method. The results suggest that the relationship between entrepreneurship and levels of income follow the pattern of a U-shaped curve. Although several studies generally have demonstrated a positive relationship between factors of competitiveness and the development of entrepreneurship, the present study shows that the effects follow the opposite direction in developing countries. However, the empirical analysis confirms that factors of competitiveness have had a significant impact on development of entrepreneurship in more affluent economies.

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