Entrepreneurship and Innovation: Driving Economic Growth

Abstract

The present study examines the relationship between entrepreneurship, innovation, and economic growth. The study utilised indicators of the number of new limited liability companies and the new business density rate to represent entrepreneurship, exported technology, and creative goods and services to measure innovation, and per capita gross income to measure economic growth. The study period was from 2011 to 2022, and the data was collected from six countries that lead the global economy: Germany, the United Kingdom, Brazil, India, Japan, and Italy. The static and dynamic data method was employed, ensuring that the model residuals are normally distributed. The impact of entrepreneurship and innovation indicators differed between the static and dynamic models. In the static model, there was a significant impact on per capita gross income, particularly regarding the number of new limited liability companies, which exhibited a positive and robust relationship compared to the density of new businesses, which exerted a strong but negative influence. Concurrently, the high-technology export index positively and substantially impacted per capita gross income. Conversely, in the dynamic model, the long-term increase in the number of limited liability companies exerted a negative influence on per capita gross income. Nonetheless, an augmentation in the density of nascent enterprises exerted a favourable influence on the economic growth index. Concurrently, the exportation of high technology per capita gross income whilst the index of creative goods and services exerted an influence only in the short run.

Keywords

• economic
• growth
• entrepreneurship
• innovation
• indicators