The relationships between entrepreneurial factors and economic growth and development: The case of selected European countries

Globally, entrepreneurship and its link to economic growth, development and prosperity has been a topic of continued discussion. Entrepreneurship provides various direct and indirect positive results within developed and developing economies. Research suggests that the entrepreneurship development may have a positive effect on several economic variables. The purpose of this study, therefore, was to identify the relationships between three entrepreneurial variables (entrepreneurial intention-EI, Early-stage entrepreneurial activity-TEA and established business ownership-EBO) and, firstly, economic development using GDP per capita and, secondly, economic growth (GDP) using an econometric analysis method. The study followed a quantitative empirical approach using secondary data from 2001 to 2019 for selected European countries (Austria, Croatia, Hungary, Poland and Slovenia). Countries were selected based on their homogeneous traits and availability of data. Long and short-run relationships between the mentioned variables were tested using a pooled panel analysis. Results indicated a long-run relationship between the variables by using the Fisher-Johansen cointegration analysis. Further results of the analysis indicated that both TEA and EBO are significant predictors at 5% significant levels respectively of economic development (GDP per capita) and economic growth (GDP). In conclusion, the study proved that links between the mentioned variables do exist and that entrepreneurial activity should be stimulated and supported as it has a significant impact on economic growth and development at various degrees of impact.