Structural Determinants of Entrepreneurial Growth: Evidence from Panel Data of 60 Countries

Abstract

This study examines the relationship between structural factors and entrepreneurial growth, focusing on the roles of financial access, institutional quality, and digital infrastructure in influencing new business registrations. The analysis utilizes panel data from 60 countries covering the period 2010 to 2022 and employs a fixed effects model to control country-specific characteristics. The dependent variable is the rate of new business formation, while the independent variables include the percentage of the population with a bank account, the regulatory quality index, and the rate of internet access. Control variables consist of gross domestic product per capita, employment rate, and tertiary education enrollment rate. The findings reveal that countries with better financial access and higher regulatory quality experience significantly higher rates of new business registration. In contrast, internet access does not have a statistically significant effect. Furthermore, gross domestic product per capita and tertiary education enrollment are positively and significantly associated with new business formation, whereas the employment rate shows no significant relationship. These results highlight the importance of developing financial infrastructure, improving regulatory governance, advancing economic development, and investing in education to stimulate entrepreneurial growth and foster a business ecosystem conducive to long-term economic progress.