Economic Impact Assessment of Entrepreneurship Policies with the GMR-Europe Model

Abstract

This chapter introduces the most recent version of the geographic macro and regional (GMR) Europe model. The model estimates the economic impacts of policies that aim at improving the quality of entrepreneurship ecosystems. As such, GMR-Europe is the first available economic impact assessment model that estimates the effects of entrepreneurship policies on several economic variables like productivity, GDP, employment, and wages. To measure the quality of regional entrepreneurial ecosystems, GMR-Europe integrates the Regional Entrepreneurship and Development Index (REDI) into its structure. In addition to introducing the GMR-Europe model, we provide simulations illustrating the capabilities of the model by providing estimates of the economic impacts of policies designed to improve the quality of entrepreneurial ecosystems. The analysis communicates an important message for policymakers demonstrating that the impacts of entrepreneurship policies vary across regions and countries in Europe depending on several territorial features.