The Effect of Political Risk On Entrepreneurship: Evidence From Selected Countries Of the World

Document Type : Research Paper

Authors

1 Associate Professor of Economics, Faculty of Economics, Management and Accounting, University of Yazd, Yazd, Iran.

2 Financial Management, Faculty of Economics, Management and Accounting, University of Yazd, Yazd, Iran

3 Economics, Faculty of Economics and Social Sciences, University of Bu-Ali Sina, Hamedan, Iran

Abstract

This study examines the effect of political risk on the entrepreneurial activities. Political risk has a negative effect on the transparency and predictability of the macro-economic and social environment, the investment rate, the tenure of policy makers and the sustainability of public policies, which all these factors hinder the growth of creativity, entrepreneurship and long-term investment decisions. In this study, the effect of political stability indicators on the density index of business entry in 85 developed and developing countries during the period of 2012-2022 has been investigated. The results of the estimation using the GLS method and then the quantitative method (QREG) show that democratic accountability, bureaucracy, government stability, law and order, social and economic conditions, investment status, corruption control, lack of Internal and external conflicts, the absence of military presence in politics, the absence of ethnic, religious and religious tensions influence the increase of people entering the business. In addition, in the studied countries, a higher level of financial and economic development has a direct relationship with indicators of political stability and facilitates the conditions for entering into entrepreneurship. Therefore, policy makers who are looking for economic development and increasing the level of socio-economic indicators should provide ways for entrepreneurs to enter the business. Considering the importance of political stability indicators and their impact on entrepreneurial activities, one of the expected policies to improve the business situation and increase the role of productive entrepreneurs in the economy of countries can be called the improvement of these indicators.

Keywords

References

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Innovation EconomicEcosystem Studies
Volume 3, Issue 4
December 2023
Pages 13-36

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