textThis paper is an introduction to the special issue from the 3rd Global Entrepreneurship Monitor Research Conference held in Washington, D.C., in 2008. The paper has three objectives. First, to discuss the importance of the three stages of economic development, the factor-driven stage, the efficiency-driven stage and the innovation-driven stage. Second, to examine the empirical evidence on the relationship between stages of economic development and entrepreneurship. Third, to present a summary of the papers in the context of the theory.

Entrepreneurship, economic development and institutions

Research background: The transformations induced by global challenges call for new approaches towards competitiveness and thus require a consistent rethinking of strategies and mechanisms so that they could be better adapted to the constantly changing context. Prior to the European Union (EU) accession, the Central and Eastern European (CEE) states began a broad process of economic reforms, including trade liberalization, mass privatization, exchange rate liberalization, all of which led to a wider opening to new markets, the creation of new opportunities for production and to ensuring the competitiveness of companies on foreign markets. By far, the most important step in the post-communist period was joining the EU, achieved after 2004. Over time, these states have faced, on the one hand, issues related to addressing systemic vulnerabilities, and on the other hand, finding the most appropriate measures to induce competitiveness. The influence of public policies on competitiveness is still an issue that needs to be debated, our study proposing to examine the reaction of external competitiveness to the increase of government spending and corruption.
Purpose of the article: The aim of this paper is to analyze the impact of fiscal policies and corruption on the external competitiveness of the eleven countries from Eastern Europe (Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia) for the period 1995?2020. The choice of this time interval is to better capture the trinomial relationship between competitiveness, fiscal policy and corruption before and after the process of integration of the CEE states into the EU.
Methods: The methodology chosen is based on ARDL (Autoregressive Distributed Lag) with structural breaks, the period taken into account being 1995?2020. The Unit root  test  of  augmented Dickey?Fuller ADF  (2016) was used  to  assess  the  time  series  stationarity. The test developed by Bai and Perron (2003) is applied to detect structural breaks, by resorting to the LM test. The tests for the cointegration between the considered variables, using the ARDL model, proposed by Pesaran et al. (2001), were also part of the research. The causality test of Granger et al. (2000) was used to assess the conditionality between the indicators. By applying these methods, it was highlighted that, especially after 2007, in the states under analysis, expansionary fiscal policies have led to internal devaluations of the currency, which ultimately increased external competitiveness, measured as real effective exchange rate. Instead, corruption has a negative impact on competitiveness.
Findings & value added: The obtained results point out the relationship between competitiveness, fiscal policy and corruption in CEE countries. In the case of those that have a high competitiveness, even if there are large government expenditures, there is also an economic environment conducive to the implementation of measures that generate added value on a large scale. Conversely, in countries where corruption is high, the impact of government fiscal policies on competitiveness is reduced due to the negative effects caused by this phenomenon. Our study brings at least two contributions to the literature. First of all, the research shows how a growth in public spending affects the competitiveness of CEE economies through the real exchange rate. Secondly, it takes into account the phenomenon of corruption applied to Eastern countries, emphasizing a decrease in the external competitiveness of these economies in response to the manifestation of corruption.

Competitiveness, fiscal policy and corruption: evidence from Central and Eastern European countries

This paper aims to investigate the impact of innovation on three macroeconomic indicators: GDP, self-employment, and foreign direct investment (FDI). The study analyses a sample of 120 countries using the Global Innovation Index (GII) and its constituent sub-indices and pillars, which provide a holistic evaluation of national innovation. Gross domestic product (GDP) per capita measures a country’s economic output, self-employment assesses entrepreneurial activity, and FDI indicates confidence in a country’s economic prospects and innovation trends. This study analyzes the data using generalized-linear and panel-corrected standard-error models. The results show that innovation positively influences GDP, domestic institutional framework, local infrastructure, local knowledge and technology, and creative outputs. In contrast, innovation negatively correlates with domestic self-employment, often associated with necessity-driven entrepreneurship. The study concludes that innovation positively affects human resources, research, and creative outputs and has no significant impact on FDI. The findings suggest that a practical regulatory framework, institutional support, domestic human capital, research and development, infrastructure, technology, and creative outputs are essential for a vibrant economy. National innovation policies supporting the GII and its constituent factors can positively affect the economy while reducing self-employment.

/pdf/the-impact-of-innovation-on-economic-growth-foreign-direct-1ehj0s8y.pdf

The Impact of Innovation on Economic Growth, Foreign Direct Investment, and Self-Employment: A Global Perspective

PurposeThe main objective of this article is to analyze the role of governance quality in influencing the economic growth of 22 selected Sub-Saharan African Countries.Design/methodology/approachThe study applied the panel dynamic Generalized Method of Moments (GMM) to analyze the data obtained from the World Bank database over the period from 2002 to 2020.FindingsThe overall finding indicated that the composite governance index has a positive significant effect on the economic growth of the countries; where a unit improvement in the aggregate governance index leads to a 3.05% increase in GDP. The disaggregated result has shown that corruption control and government effectiveness have a negative significant effect on growth performance, whereas, the rule of law and regulatory quality showed a positive significant effect. Political stability and voice and accountability have an insignificant effect on economic growth.Research limitations/implicationsDue to data limitations, this study could not address the whole members of Sub Sahara African Countries and could not see the causal relationship.Practical implicationsThe study suggested a strong commitment to the implementation of policy and reform measures on all governance factors. This may add to the need to devise participatory corruption control mechanisms; to closely look at the proper implementation of policies and reforms that constitute the government effectiveness factors, and properly implement the rule of law at all levels of the government with a strong commitment to realizing it so that citizens at all levels can have full confidence in and abide by the rules of society.Originality/valueEven though there are some studies conducted using conventional methods of panel data analysis such as random effect or fixed effects, this empirical study used more advanced panel dynamic generalized moment of methods to examine the role of improvement in governance quality on economic growth.

Governance quality and economic growth in Sub-Saharan Africa: the dynamic panel model

We debate the motivation for and effectiveness of public policies to encourage individuals to become entrepreneurs. Reviewing established evidence we find that most Western world policies do not greatly reduce or solve any market failures but instead waste taxpayers’ money, encourage those already intent on becoming entrepreneurs, and mostly generate one-employee businesses with low-growth intentions and a lack of interest in innovating. Most policy initiatives that would have the effect of promoting valuable entrepreneurship would not be recognizable as such, because they would primarily address other market failures: A central-payer health care would remove healthcare-related distortions affecting employment choices; greater STEM education would produce more engineers of which some start valuable new firms; and labor market reform to encourage hiring immigrants in jobs they have been educated for would reduce inefficient allocation of talent to entrepreneurship.

Public policy to promote entrepreneurship: a call to arms

Governance is a factor that affects new entrepreneurial activities and economic growth. However, the effectiveness of governance will vary depending on a country’s development level and entrepreneurial motivation. The main goal of this study is to use global entrepreneurship monitor (GEM) data and to apply a three-stage least squares (3SLS) regression to investigate the impact of six governance indicators on the entrepreneurship-growth nexus in 64 countries during 2010-2018. In addition, this paper describes whether the impact of governance indicators varies according to the country’s development stage. The results show that entrepreneurship and governance indicators have a significant impact on economic growth. However, depending on the development stage of the country, major differences can arise regarding the degree and nature of this relationship among countries. Specifically, the results show that entrepreneurship can promote economic growth in innovation-driven countries, but it cannot promote economic growth in factor- and efficiency-driven countries. In particular, the results show that opportunitydriven entrepreneurship (ODE) is only positively correlated with the economic growth of innovation-driven countries. In contrast, necessity-driven entrepreneurship (NDE) is negatively correlated with the economic growth of factor- and efficiency-driven countries. In addition, the survey results show that governance quality indicators contribute to entrepreneurial activities in the three groups of countries examined. This research contributes to the literature from a theoretical perspective (the use of good governance as an intermediary between entrepreneurship and growth) and a practical perspective (providing insights to improve the quality of governance to promote entrepreneurship and economic growth).

Governance Quality, Entrepreneurship and Economic Growth

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Governance Quality, Entrepreneurship and Economic Growth