To Empirically Study the Link between Entrepreneurship, Innovation and Economic Growth

Abstract— Entrepreneurship is a crucial component of a flourishing economy, driving innovation, Schumpeterian rivalry, and overall economic vitality. Using GEM data and a three-stage least squares (3SLS) model, this research looks at the relationship between entrepreneurial activity and GDP growth in 125 industrialized and developing countries. This study attempts to put a number on expansion, creativity, and initiative by using a Cobb-Douglas production function specification in conjunction with the Static Panel Data Method and the Generalized Method of Moments (GMM). Although the results imply that innovation and entrepreneurship may not significantly impact development in developing nations, the positive and statistically significant relationship between the two groups of countries more than compensates for any short-term setbacks.