The impact of Business Environment on Entrepreneurship development and Economic Growth in Developing Countries

Document Type : Research/Original/Regular Article

Authors

1 MA in Entrepreneurship Management, Faculty of Humanities, Gonbad Kavous University, Gonbad Kavous, Iran

2 Assistant professor, Department of Administrative and Economics, Faculty of Humanities, Gonbad Kavous University, Gonbad Kavous, Iran

Abstract

The purpose of this study is to investigate and analysis the impact of the business environment on the Development of Entrepreneurship and Economic Growth. Using equations system (2 sls) and Panel data method during the 2010-2015 for 20 developing countries by higher than average income, has been carried out. In this study of the two regression equation has been used in the equation for the economic growth of entrepreneurial indicator variables , foreign direct investment , labour and fix capital and in the equation for the entrepreneurship indicator from variables of business regulations index and the government expenditure on education and the economic growth rate is used. Research findings illustrate that business regulations index indirectly and entrepreneurial index, foreign direct investment, labour and fix capital directly have significant and positive impact on the economic growth. Where as business regulations indicator and the government expenditure on education show significant and positive impact on entrepreneurship in research sample.

Keywords

Main Subjects


Abdolahi, F., Mehrabani, F., & Basirat, M. (2013). "Comparing the impact of business environment indexes on economic development: the cases of Iran and OECD countries". The First Electronic National Conference on Economic Prospects of Iran through National Production Support Approach. Isfahan, Iran. (Persain)
Acemoglu, D., Johnson, S., & Robinson, J. A. (2001). "The colonial origins of comparative development: an empirical investigation". American Economic Review, 91(5), 1369-1401.    
ــــــــــــــــــــــــــــــــــــــــــــــــــــــ (2005). "Institutions as a fundamental cause of long-run growth". Handbook of Economic Growth, 1(8), 385-472.
Acs, Z. J., Audretsch, D. B., Braunerhjelm, P., & Carlsson, B. (2005). "Growth and entrepreneurship: an empirical assessment". Papers on Entrepreneurship, Growth and Public Policy, 3205, 132-145. 
Aghion, P., Howitt, P., Brant-Collett, M., &  García-Peñalosa, C. (1998). Endogenous growth theory. Cambridge, MA: MIT Press.
Aidis, R., Estrin, S., & Mickiewicz, T. (2008). "Institutions and entrepreneurship development in Russia: A comparative perspective". Journal of Business Venturing, 23(6), 656-672. [DOI: 10.1016/j.jbusvent.2008.01.005
Alexandrova, M. (2004). "Entrepreneurship in a transition economy: The impact of environment on entrepreneurial orientation". Problems and Perspectives in Management, 2(2), 140-148. [DOI: 10.5539/ibr.v6n1p153]
Amaghouss, J., & Ibourk, A. (2013). "Entrepreneurial activities, innovation and economic growth: the role of cyclical factors: evidence from oecd countries for the period 2001-2009". International Business Research, 6(1), 153-162.
Aparicio, S., Urbano, D., & Audretsch, D. (2016). "Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence". Technological Forecasting and Social Change, Publisher Elsevier, 102(12), 45-61.
Bakhtiari, S., Shayesteh, A. (2012). "Analyzing the impact of improving business environment on the economic development of some countries: a focus on Iran". Journal of Economic Sciences, 6(19), 176-204. (Persain)
Dawson, J. W. (2006). "Regulatory, investment and economic growth a cross countries". Journal of  Cato J, 26(3), 489.
Dehghan Shabani, Z., & Afarinesh Far, S. (2015). "Analyzing the impact of business environment on attracting direct foreign investors in Iran and some selected countries”. Iranian Journal of Economic Research, 20(62), 1-30. (Persain)
Djankov, S., McLiesh, C., & Ramalho, R. M. (2006). "Regulation and growth". Economics Letters, 92(3), 395-401. [DOI: 10.1016/j.econlet.2006.03.021]
Eliasson, G. (1996). "Spillovers, integrated production and the theory of the firm". Journal of Evolutionary Economics, 6(2), 125-140.
Fritsch, M. (2008). "How does new business formation affect regional development? Introduction to the special issue". Small Business Economics, 30, 1-14.
Galindo, M. Á., & Méndez, T. M. (2014). "Entrepreneurship, economic growth, and innovation: Are feedback effects at work?". Journal of Business Research, 67(5), 825-829. [DOI: 10.1016/j.jbusres.2013.11.052]
Gillanders, R., & Whelan, K. (2010). "Open for business? Institutions, business environment and economic development". Publisher University College Dublin. School of Economics, 1-26. [DOI: 10.1111/kykl.12067]
Gojarati, D. (1999). The principles of econometrics (translated into Farsi by Hamid Abrishami) (vol. 2). Tehran: Tehran University Publication. (Persain)
Haidar, J. I. (2012). "The impact of business regulatory reforms on economic growth". Journal of the Japanese and International Economies Elsevier, 26(3), 285-307. [DOI: 10.1016/j.jjie.2012.05.004]
Hall, R. E., & Jones, Ch. I. (1999). "Why Do Some Countries Produce So Much More Output Per Worker Than Others?". Quarterly Journal of Economics, 114(1), 83-116. [DOI: 10.3386/w6564]
Hanusch, M. (2012). "The doing business indicators, economic growth and regulatory reform". Browser Download This Paper, 1-19.
Hekmati Farid, S., Mohammadzadeh, Y., & Khazali, D. (2016). "The effect of improving business environment and respecting intellectual property on the economic development of the countries with mid-high GDP". Quarterly Journal of Economic Growth and Development Research, 6(22), 119-130. (Persain)
Holcombe, R. G. (1998). "Entrepreneurship and economic growth". Quarterly Journal of Austrian Economics, 1(2), 45-62.
Hosseinzadeh Bahreini, M. H., Falahi, M. A., & Erfani Jahanshahi, F. (2012). "The impact of business regulations on economic development: the case of some developing and developed countries". Journal of Economy and Regional Development, 19(3), 101-121. (Persain)
Hosseinzadeh, H. (2018). "The impact of improving business environment on the economic development of some developing countries". Quarterly Journal of the Macro and Strategic Policies, 6(23), 498-517. (Persain)
Kirzner, I. M . (1973). Competition and entrepreneurship. Publisher University of Chicago Press.
Klapper, L., & Love, I. (2011). "The impact of business environment reforms on new firm registration". World Bank Policy Research working paper, 33(2), 60-89.
Lever, M. H. C., & Nieuwenhuijsen, H. R. (1999). The impact of competition on productivity in Dutch manufacturing. Innovation, Industry Evolution and Employment. Cambridge: Cambridge University Press.
Li, H., Yang, Z., Yao, X., & Zhang, J. (2009). "Entrepreneurship and growth: Evidence from china". Discussion papers, 22. [DOI: 10.1016/j.chieco.2012.04.015]
Lucas, R. E. (1988). "On the mechanics of economic development". Journal of Monetary  Economics, 22(1), 3-42. [DOI: 10.1016/0304-3932(88)90168-7]   
Mafoozi, B., Tabatabaii Nasab, Z., & Abtahi, Y. (2018). "The impact of institutional quality and market pressure on direct foreign investment: an international study". Quarterly Journal of the Macro and Strategic Policies, 6(24), 686-709. (Persain)
Mairesse, M., & Mohnen, P. (2001). "To be or not to be innovative: an exercise in measurement". National Bureau of Economic Research. NBER Working, 44-59.
Manki, N., Romer, G., & Weil, D. (1992). "A contribution to the empirics of economic growth The Quarterly". Journal of Economics, 107(2) 407-437.
Martin, M. G., Picazo, M. T. M., & Navarro, J. L. A. (2010). "Entrepreneurship, income distribution and economic growth". International Entrepreneurship and Management Journal, 6(2), 131-141.
Mehrabani, F., Abdolahi, F., & Basirat, M. (2016). "The impact of business environment on Iran’s economic development, MENA and OECD countries using GMM". Quarterly Journal of the Macro and Strategic Policies, 4(13), 65-96. (Persain)‌
Messaoud, B., & Teheni, Z. E. G. (2014). "Business regulations and economic growth: What can be explained?". International Strategic Management Review, 2(2), 69-78. [DOI: org/10.1016/j.ism.2014.03.001]
Najarzadeh Nooshabadi, A., Mehranfar, J., & Tabrasi, M. (2012). "The role of productive and non-productive entrepreneurship on economic development". Journal of Planning and Budget, 17(3), 115-130. (Persain)
North, D. C. (1994). "Economic Performance through Time". The American Economic Review, 84(3), 359-368. from: www.jstor.org/stable/2118057
Nyström, K. (2010). "Business Regulation and Red Tape in the Entrepreneurial Economy, CESIS and the Division of Economics". KTH and the Ratio  Institute, Stockholm, 225.
Rodrik, D., Subramanian, A., & Trebbi, F. (2004). "Institutions rule: The primacy of institutions over geography and integration in economic development". Journal of  Economic Growth, 9(18) 131-165. from: https://www.jstor.org/stable/40212696  
Romer, P. M. (1986). "Increasing Returns and Long-Run Growth". Journal of Political Economy, 94(5), 1002-1037. from: https://www.jstor.org/stable/1833190
ـــــــــــــــ (1990). "Endogenous Technical Change". Journal of Political Economy, 98(1), 71-102. 
Sabahi, A., Naji Meidani, A. A., & Soleimani, A. (2013). "Analyzing the impact of entrepreneurship on the economic development of some countries". Quarterly Journal of Economic Growth and Development Research, 3(11), 9-18. (Persain)‌
Salgado Banda, H. (2004). Measures and Determinants of Entrepreneurship: An Empirical Analysis, discussion paper in economics-birkbeck college, University of London.
Schumpeter, J. A. (1934). Theory of economic development. Cambridge: Harvard University Press. vol. 25, no.12, pp.128-150.
Shirley, M. M. (2008). "Institutions and development. Handbook of new institutional economics". Springer Berlin Heidelberg, 35(5), 611-638.
Solow, R. M. (1956). "A Contribution to the Theory of Economic Growth Quarterly". Journal of  Economics70(1),  65- 94. [DOI: org/10.2307/2118477]
Urbano, D., & Aparicio, S. (2016). "Entrepreneurship capital types and economy  growth: International evidence". Technological Forecasting and Social Change, 102, 34-44. [DOI: 10.1016/j.techfore.2015.02.018]
Van Stel, A., Carree, M. A., & Thurik, R. T. (2004). "The effect of entrepreneurship on national economic growth: An analysis using the GEM database". Papers on Entrepreneurship, Growth and Public Policy, 3404.1-22. from: https://www.jstor.org/stable/i40008333
Van Stel, A., Storey, D. J., & Thurik, A. R. (2007). "The effect of business regulations on nascent and young business entrepreneurship". Small Business Economics, 28(2), 171-186. from: http://dx.doi.org/10.1007/s11187-006-9014-1
Williamson, O. E. (1998). "The institutions of governance". The American Economic Review, 88(2), 75-79. from: http://www.jstor.org/stable/116896
Zali, et al. (2015). ''The research project of entrepreneurship indexes in Iran based on global entrepreneurship model''. The 8th Report of GEM Research (2015). Ministry of Cooperatives Labor and Social Welfare, The Global Entrepreneurship Office of Iran, Faculty of Entrepreneurship. (Persain)