Entrepreneurship and Economic Growth: Evidence from G-20 Economies

The present study has investigated different facets of entrepreneurship and evaluated the relationship between the dynamics of entrepreneurship and economic growth in G-20 economies while controlling the impact of lower and higher income group economies. We have used an econometric model by pooling the cross-section of countries with time-series data on each country over the study period of 2001-2016 depending upon the availability of the dataset. Data have been taken from Global Entrepreneurship Monitor (GEM) for entrepreneurial dynamics, World Economic Forum, and IMF World Economic Outlook database. Total Entrepreneurship Activity (TEA) is used as a proxy for measuring entrepreneurial dynamics, GDP per capita (adjusted PPP) for measuring economic growth, and Growth Competitiveness index (GCI) for measuring competitiveness. We have found a significant positive relationship between entrepreneurial activities with respect to GDP, GCI, respectively. The control variable also has significant impact on entrepreneurial activities. The result of regression models has supported that competitiveness and economic growth have a significant impact on entrepreneurial dynamics in G-20 countries. Study results have suggested that there must be more advanced strategies to accelerate the growth rate and move more rapidly toward the Schumpeterian framework. Policymakers should emphasize more on promoting innovative entrepreneurial activities to achieve more economic growth and development.