Entrepreneurial resilience amid economic shocks: A panel data analysis of ASEAN countries

This study investigates how GDP and inflation shocks asymmetrically influence entrepreneurial resilience across ASEAN countries. It aims to provide empirical insights into how macroeconomic instability affects enterprise formation and survival in emerging economies. The study employs a Panel Nonlinear Autoregressive Distributed Lag (Panel NARDL) model on annual panel data from 2000 to 2023 across 10 ASEAN countries. Entrepreneurial resilience is proxied by the number of new business registrations. The analysis incorporates second-generation unit root testing (CIPS) and the Common Correlated Effects Mean Group (CCE-MG) estimator to address cross-sectional dependence and heterogeneity. The results reveal significant long-run asymmetries. Negative GDP shocks consistently reduce entrepreneurial resilience, highlighting pro-cyclicality in business formation. Inflation shocks show mixed effects, with positive inflation stimulating entrepreneurship in some countries while discouraging it in others. Short-run responses are generally weak, suggesting delayed entrepreneurial adjustment to macroeconomic volatility. The study is limited to macroeconomic variables and does not incorporate micro-level firm characteristics or behavioural indicators. Future research may integrate firm-level panel data to examine how internal firm capabilities mediate these macroeconomic effects. The findings underscore the need for counter-cyclical entrepreneurship policies tailored to country-specific macroeconomic dynamics. Promoting macroeconomic stability and inflation management are critical for maintaining entrepreneurial momentum.