Drivers of Entrepreneurship: Linking With Economic Growth and Employment Generation (A Panel Data Analysis)

The need for entrepreneurs for economic development has always been crucial in history because they are the leaders who invent innovative ideas that give spark to economic activities. They are responsible for the combination of factors of production by capital formation, creating employment opportunities, wealth distribution that facilitates development and growth. A well explained definition of entrepreneurship in the words of Wennekers and Thurik (1999) that successfully makes the functional roles of entrepreneurs is: “…the manifest ability and willingness of individuals, on their own, in teams within and outside existing organisations, to perceive and create new economic opportunities (new products, new production methods, new organisational schemes and new product-market combinations) and to introduce their ideas in the market, in the face of uncertainty and other obstacles, by making decisions on location, form and the use of resources and institutions.” (46–47) High and sustained economic growth is the fundamental objective of every developed or developing country’s governmental policy. Economic growth is a long term expansion of the productive potential of the economy. It generates employment in the economy and raises the living standards of the nation. Economic growth promotes business activities in private sector, increases company profits and enhances investor confidence.