Investigating the relationship between entrepreneurship, economic growth and employment; panel VAR approach

Badraghnezad, Ali; Mohammadi Khyareh, Mohsen; Adabi Firouzjaee, Bagher

doi:10.22075/jem.2022.25702.1680

Investigating the relationship between entrepreneurship, economic growth and employment; panel VAR approach

Document Type : Original Article

Authors

¹ MSC student of Entrepreneurial management, Faculty of Humanities and physical education, Gonbad Kavous University

² Assistant Professor, Department of Administrative Sciences and Economics, Faculty of Humanities and physical education, Gonbad Kavous University

10.22075/jem.2022.25702.1680

Abstract

the main purpose of this study was to investigate the endogenous interaction between entrepreneurship, economic growth, and employment in selected 30 emerging countries by means of Panel Vector Autoregressive Method (PVAR) and System Generalized Method of Moments (GMM-SYS) from 2009-2019. The empirical results show that, firstly, entrepreneurship with a rest period has a significant positive impact on employment. Secondly, economic growth leads to an increase in employment, but with a delay, and vice versa. Thirdly, there is a bidirectional causal relationship between entrepreneurial activity and employment, which suggests a dynamic interaction between entrepreneurship and employment. However, the relationship between entrepreneurship and economic growth (and vice versa) was not significant in the countries studied. This result is due to impact of different macroeconomic environments in emerging economies. In addition, the number of small-scale, informal, self-employed, and often non-productive entrepreneurs is greater than the number of productive entrepreneurs in these countries.

Keywords