Unveiling the relationship between entrepreneurial aspirations and prosperity: An international panel study using GEM data

Abstract

This study examines the impact of entrepreneurship with high growth expectations, innovation, and international orientation as determinants of entrepreneurial aspirations and their effect on prosperity. More specifically, the study examines a panel of 30 developed and emerging countries observed over the 2009–2018 period. The research hypotheses were tested by the appropriate panel unit root and cointegration tests allowing for cross-section dependence and for estimating the aspirations-prosperity relationship using FMOLS for a heterogeneous panel. The findings indicate that entrepreneurs who expect to create jobs and/or to be involved in international trade significantly enhance prosperity. Surprisingly, entrepreneurship with innovative features had a negative effect on wellbeing. When averaging observations across countries, the results suggest that entrepreneurial aspirations Granger-cause the prosperity index. This study makes an important contribution to this evolving research area as it explains the conditions countries need to promote to move toward more sustainable entrepreneurial activities that create welfare for the population.