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Institutions, Human Capital and Entrepreneurship Density

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Abstract

This study examines the impacts of national institutions and human capital on entrepreneurship density in a global sample of 67 economies over the period 2006–2016. Furthermore, the associations between human capital and institutions on entrepreneurial activities are investigated while controlling for financial development, economic growth, trade openness, FDI inflows and total natural rents. Employing the panel corrected standard error estimator to deal with cross-sectional dependence, we find that formal institutions represented by entrepreneurship procedures and the general institutional quality are positively associated with entrepreneurship density. Also, informal institutions represented by socialist history, common law system and colonial history are positively associated with entrepreneurship density. Notably, human capital has a moderating effect in reducing the negative impacts of weak institutions.

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Notes

  1. The six indicators are including control of corruption, government effectiveness, political stability and absence of violence, regulatory quality, and rules of law, voice and accountability.

  2. 150 economies are dropped due to missing data

  3. See Table A1, Appendix, for list of countries.

  4. The results are provided upon requests.

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Authors and Affiliations

  1. Aston Business School, Aston University, Birmingham, UK

    Bach Nguyen

  2. University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam

    Bach Nguyen

  3. School of Banking, University of Economics Ho Chi Minh City, 59C Nguyen Dinh Chieu, District 3, Ho Chi Minh City, Vietnam

    Nguyen Phuc Canh

  4. School of Public Finance, University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam

    Su Dinh Thanh

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  1. Bach Nguyen
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Nguyen, B., Canh, N.P. & Thanh, S.D. Institutions, Human Capital and Entrepreneurship Density. J Knowl Econ 12, 1270–1293 (2021). https://doi.org/10.1007/s13132-020-00666-w

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