The Impact of Entrepreneurship on Economic Competitiveness in the Member States of the World Economic Forum: Generalized Method of Moments (GMM) Approach

Document Type : Research Paper

Authors

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Abstract

The main concerns of policy makers in industrialized and developing countries are national competitiveness and how it can be increased. The aim of the present study is to investigate the relationship between the quality of entrepreneurial activities and economic competitiveness in the WEF member states using the GMM estimation method. In this study, 75 WEF member countries were classified into three groups of resource-oriented economies, focus efficiency and innovation, in the period 2018-2010 and according to the state of economic development. A country's competitiveness is defined in the Global Competitiveness Index as a dependent variable. Independent variables include two indicators for measuring entrepreneurial quality (innovation and entrepreneurship with high growth expectations), and control variables are a series of six indicators for the entrepreneurial and macro-economic environment. The results show significant differences and some similarities between the countries. For resource-driven countries, factors such as innovation, economic growth, inflation, tax rates and the cost of starting a business are key to competitiveness. In relation to performance-oriented countries, the variables innovation, entrepreneurship with high growth expectations, economic growth, foreign investment, tax rates and trade openness are the determinants of competitiveness and ultimately for innovation countries that focus on determining the determinants of competitiveness: innovation, growth - expected entrepreneurship. High, economic growth, inflation, tax rates, openness to trade and start-up costs. Therefore, policies to improve the competitiveness of the economy vary according to the level of development of the countries.

Keywords


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