Author(s):
1. Katja Crnogaj,

Abstract:
Even though the importance of entrepreneurship for economic development is widely recognised, a lot of disagreements on the links between entrepreneurship and economic growth and development is to be found. There is a broad array of opinions on appropriate set of factors that influence the entrepreneurship processes, on ways of their influence and on differentiating between countries, as well as on the most efficient methods and measures for improving the entrepreneurial potential. Therefore it is important that we first accurately understand influential entrepreneurship factors and establish a more holistic framework, which positions the entrepreneurship in the core of the competitiveness of a given national economy. The existing entrepreneurship measures must be carefully selected and interpreted, so that their relevance can be adequately taken into account when preparing policy making decisions. Examination of entrepreneurship outcomes, where the focal point is on the influence of entrepreneurial activity on the growth of the economy, which translates into stable and sustainable economic and social development, is also complex. As the many indicators of economic growth (e.g. GDP) have a limited explanatory power, there is a need to broaden the research framework by considering also indicators of social progress. The main research objective in this paper is to determine, whether and to what extent the link between entrepreneurship, economic growth and social progress differs between the developed and the less developed countries and what policy making suggestion can be made. The data will be obtained from Global Entrepreneurship Monitor (GEM) database and complemented with the data from other international sources such as WB, IMF and GCI, among others. Longitudinal analysis will allow us to study different areas and the dynamics of change in successive time periods. We will focus on particular data that provide information about individuals and countries, and examine the impact of entrepreneurial activity (total early stage entrepreneurship) and its quality (innovation oriented entrepreneurship) in a sample of 24 high- and low- income countries for the period 2006 - 2010 (24 countries * 5 years = 120 observations). We expect that the effect of entrepreneurial activity on economic growth significantly depends on time period and achieved development stage. Accordingly, governmental measures have to be adjusted to the specific level of national economy development and depend on the entrepreneurship type we wish to promote. Defined regression models will be estimated with different econometric business methods such as Ordinary Least Squares and improved with Least Square Dummy Variable or Fixed Effects models, which allow for the appraisal of the specific effects of a single unit of observation and time. With the aim to provide clearer picture of interdependence between entrepreneurship and development, the paper will clarify: concepts of examining and measuring entrepreneurship in various stages of economics development, relationship between entrepreneurship and socio-economic progress, impact of innovation oriented entrepreneurship compared to entrepreneurship in general, and conclude with some policy making suggestions.

Key words:
entrepreneurship, entrepreneurial activity, measuring entrepreneurship, innovativeness, economic growth and social development, entrepreneurship policy

Thematic field:
Government and economic development

Date of abstract submission:
20.06.2012.

Number of visits:
536

Conference:
REDETE 2012