The role of macroeconomic factors on the development of entrepreneurship

Document Type : Research Paper

Authors

1 Assistant Professor of Economics, University of Bozorgmehr, Qaen, Iran.

2 Head of incubator/ south khorasan technology park

3 Director of Birjand Growth Center, Birjand, Iran.

Abstract

Macroeconomic conditions are important in the start-up, performance, development and sustainability of businesses. Some concepts related to economic conditions affecting entrepreneurial activities include economic recession and boom conditions, inflation level, monetary and credit policies, financial policies and government expenses, and economic instability. Changes in economic conditions may cause changes in decision-making in starting or continuing businesses. Therefore, awareness of the relationship between entrepreneurial activities and macroeconomic performance is inevitable for entrepreneurship researchers and policy makers. In this study, in order to investigate economic environment factors on the development and sustainability of entrepreneurial activities, the data of 20 developing countries during the years 2009-2019 have been used. Using panel data and the method of generalized moments in panel data, the relationship between variables was analyzed. The results of the research show that government expenditures in the education sector and the amount of credits granted to the private sector have a significant and positive effect on the entrepreneurship index. While economic growth has no significant relationship with the level of entrepreneurship. Also, the level of inflation and interest rate has a positive effect on the entrepreneurship index, so that from the point of view of entrepreneurs, the presence of liquidity and increased demand, as well as the supply of more financial resources, is preferable to reducing their costs.

Keywords

References

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Innovation EconomicEcosystem Studies
Volume 3, Issue 4
December 2023
Pages 37-53

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