Business entrepreneurship and economic growth in Peru

Abstract

This article aims to determine the influence of entrepreneurship on Peru's economic growth. Comprehensive data on the 24 Peruvian departments regarding the 2007-2017 period was used to develop restricted and unrestricted econometric models by using the Ordinary Least Squares multiple regression method. The result of the restricted model, chosen as the best according to likelihood-ratio tests, indicates that for every 1% increase in the number of companies, the growth rate of the departmental gross domestic product per capita increases approximately by 0.68%. This research provides great empirical evidence on the importance of business entrepreneurship in order to achieve higher rates of departmental economic growth and homogeneity.