An empirical analysis of the entrepreneurial ecosystem and its impact on economic growth across different income levels

Abstract

PurposeThis paper investigates the dynamics of entrepreneurial ecosystems and their effect on economic growth across different income levels. The research aims to identify the key entrepreneurial drivers that influence economic development and provide strategic insights for tailoring policy interventions.Design/methodology/approachThe study utilizes data from the Global Entrepreneurship Monitor (GEM) and the World Bank (2003-2022) to examine entrepreneurial behavior and attitudes (EBA) and entrepreneurial framework conditions (EFCs). Advanced machine learning techniques, including random forest and partial dependence plots, are employed to analyze the relationship between these entrepreneurial factors and economic growth across various economic contexts.FindingsThe findings reveal that EBA has a significant impact on economic growth in lower-income regions, largely driven by necessity entrepreneurship, while EFCs are more influential in higher-income areas where support structures are more developed. These results highlight the need for differentiated policy interventions based on income levels.Research limitations/implicationsThe study's limitations include potential data gaps from under-represented regions and a lack of longitudinal analysis. Future research could benefit from expanding the dataset to include informal sectors and assessing the long-term impacts of entrepreneurial ecosystem changes on economic growth.Practical implicationsPolicymakers can utilize the findings to design targeted interventions that enhance entrepreneurial ecosystems, addressing specific challenges in both lower- and higher-income regions to foster sustainable economic growth.Originality/valueThis paper contributes novel insights into the differential impact of entrepreneurial ecosystems on economic growth across income levels, offering valuable guidance for policymakers and researchers interested in promoting entrepreneurship as a driver of economic development.