The Impact of Entrepreneurship on Economic Growth in 95 Developing and Emerging Countries


  • Mohamed Salah Zouita



economic growth, entrepreneurship, institutions, emerging countries


This paper examines the effects of entrepreneurship on economic growth in 95 developing and emerging countries during the period 2006-2018. It develops aggregate and disaggregate empirical analyses by decomposing the full sample according to income level and geographic distribution. Moreover, it controls for the role of institutions when assessing the effects of entrepreneurship on economic growth. The empirical study consists of estimating a growth model using the fixed effects, random effects and system GMM estimators. The findings show that entrepreneurial activity exerts a positive and robust effect on economic growth in the full sample. The highest impact is reported in Asia, followed by the Middle East and North Africa, Latin America and Caribbean countries, and Sub-Saharan Africa. Furthermore, the impact of entrepreneurship on growth is higher in low-income economies than in high-income economies. Finally, the regulatory quality enhances the positive effects of entrepreneurship on economic growth.

JEL Codes - L26; O43; O47


Abid Bashir, H., and Akhtar, A., 2016. The role of innovative entrepreneurship in economic development: A study of G20 countries. Management Studies and Economic Systems, 3(2), 91-100.

Acs, Z., 2006. How is entrepreneurship good for economic growth? Innovations: Technology, Governance, Globalization, 1(1), 97-107.

Acs, Z., and Virgill, N., 2010. Entrepreneurship in Developing Countries. Foundations and Trends in Entrepreneurship, 6(1), 1-68.

Almodóvar-González, M., Fernandez-Portillo, A., and Diaz-Casero, J. C., 2020. Entrepreneurial activity and economic growth. A multi-country analysis. European Research on Management and Business Economics, 26(1), 9-17.

Aparicio, S., Urbano, D., and Audretsch, D., 2016. Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence. Technological Forecasting and Social Change, 102(January), 45-61.

Aydoğan, E. T., and Sevencan, A., 2018. The Effect of Entrepreneurship on Economic Growth: A Panel Approach in MENA Countries. In N. Faghih and M. R. Zali (Eds.), Entrepreneurship Ecosystem in the Middle East and North Africa (MENA) (pp. 479-490): Springer.

Baumol, W. J., 1996. Entrepreneurship: Productive, unproductive, and destructive. Journal of Business Venturing, 11(1), 3-22.

Berthold, N., and Grundler, K., 2012. Entrepreneurship and economic growth in a panel of countries (No. 118): Wirtschaftswissenschaftliche Beitrage des Lehrstuhls fur Volkswirtschaftslehre, Wirtschaftsordnung und Sozialpolitik, Universitat Wurzburg.

Biersteker, T. J., 1990. Reducing the role of the state in the economy: A conceptual exploration of IMF and World Bank prescriptions. International Studies Quarterly, 34(4), 477-492.

Bist, J. P., 2018. Financial development and economic growth: Evidence from a panel of 16 African and non-African low-income countries. Cogent Economics & Finance, 6(1), 1449780.

Bosma, N., Content, J., Sanders, M., and Stam, E., 2018. Institutions, entrepreneurship, and economic growth in Europe. Small Business Economics, 51(2), 483-499.

Carree, M. A., and Thurik, A. R., 2010. The impact of entrepreneurship on economic growth. In Z. J. Acs and D. B. Audretsch (Eds.), Handbook of Entrepreneurship Research (pp. 557-594): Springer.

Chen, Y., and Puttitanun, T., 2005. Intellectual property rights and innovation in developing countries. Journal of Development Economics, 78(2), 474-493.

De Gregorio, J., and Guidotti, P. E., 1995. Financial development and economic growth. World Development, 23(3), 433-448.

Doran, J., McCarthy, N., and O'Connor, M., 2018. The role of entrepreneurship in stimulating economic growth in developed and developing countries. Cogent Economics & Finance, 6(1), 1442093.

Dvouletý, O., Gordievskaya, A., and Prochazka, D. A., 2018. Investigating the relationship between entrepreneurship and regional development: Case of developing countries. Journal of Global Entrepreneurship Research, 8(1), 16.

Guru, B. K., and Yadav, I. S., 2019. Financial development and economic growth: Panel evidence from BRICS. Journal of Economics, Finance and Administrative Science, 24(47), 113-126.

Gylfason, T., and Herbertsson, T. T., 2001. Does inflation matter for growth? Japan and the World Economy, 13(4), 405-428.

Hall, J. C., and Sobel, R. S., 2008. Institutions, entrepreneurship, and regional differences in economic growth. Southern Journal of Entrepreneurship, 1(1), 69-96.

Kaufmann, D., Kraay, A., and Mastruzzi, M., 2011. The Worldwide Governance Indicators: Methodology and Analytical Issues. Hague Journal on the Rule of Law, 3, 220-246.

Keho, Y., 2017. The impact of trade openness on economic growth: The case of Cote d'Ivoire. Cogent Economics & Finance, 5(1), 1332820.

Koster, S., and Rai, S. K., 2008. Entrepreneurship and economic development in a developing country: A case study of India. The Journal of Entrepreneurship, 17(2), 117-137.

McKinnon, R., 1973. Money and Capital in Economic Development: Brookings Institution.

North, D., 1990. Institutions, Institutional Change and Economic Performance: Cambridge University Press.

Olken, B. A., and Pande, R., 2012. Corruption in developing countries. Annual Review of Economics, 4(1), 479-509.

Peterson, E. W. F., 2017. The role of population in economic growth. SAGE Open, 7(4), 1-15.

Schumpeter, J. A., 1934. The Theory of Economic Development: Harvard University Press.

Shane, S., and Eckhardt, J., 2005. The individual-opportunity nexus. In Z. Acs and D. Audretsch (Eds.), Handbook of Entrepreneurship Research: An Interdisciplinary Survey and Introduction (pp. 161-191): Springer.

Smith, W., and Chimucheka, T., 2014. Entrepreneurship, economic growth and entrepreneurship theories. Mediterranean Journal of Social Sciences, 5(14), 160-160.

Stam, E., and Van Stel, A., 2011. Types of entrepreneurship and economic growth. In A. Szirmai, W. Naudé and M. Goedhuys (Eds.), Entrepreneurship, Innovation, and Economic Development (pp. 78-95): Oxford Scholarship Online.

Stoica, O., Roman, A., and Rusu, V. D., 2020. The Nexus between Entrepreneurship and Economic Growth: A Comparative Analysis on Groups of Countries. Sustainability, 12(3), 19.

Urbano, D., and Alvarez, C., 2014. Institutional dimensions and entrepreneurial activity: An international study. Small Business Economics, 42(4), 703-716.

Urbano, D., and Aparicio, S., 2016. Entrepreneurship capital types and economic growth: International evidence. Technological Forecasting and Social Change, 102(January), 34-44.

Urbano, D., Aparicio, S., and Audretsch, D., 2019. Twenty-five years of research on institutions, entrepreneurship, and economic growth: What has been learned? Small Business Economics, 53(1), 21-49.

Wennekers, S., and Thurik, R., 1999. Linking entrepreneurship and economic growth. Small Business Economics, 13(1), 27-56.

Wong, P. K., Ho, Y. P., and Autio, E., 2005. Entrepreneurship, innovation and economic growth: Evidence from GEM data. Small Business Economics, 24(3), 335-350.

World Bank, 2020. New country classifications by income level: 2019-2020. from

Wu, S. Y., Tang, J. H., and Lin, E. S., 2010. The impact of government expenditure on economic growth: How sensitive to the level of development? Journal of Policy Modeling, 32(6), 804-817.




How to Cite

Zouita, M. S. (2021). The Impact of Entrepreneurship on Economic Growth in 95 Developing and Emerging Countries. Scientific Annals of Economics and Business, 68(2), 145–162.