The dynamics of link between entrepreneurship, government support and economic growth: Evidence from BRICS countries

• Published date: 01 December 2022
• Author: Ritu Rani,Naresh Kumar
• Date: 01 December 2022
• DOI: http://doi.org/10.1002/pa.2741

RESEARCH ARTICLE

The dynamics of link between entrepreneurship, government

support and economic growth: Evidence from BRICS countries

Ritu Rani

1

| Naresh Kumar

2

1

Department of Commerce, Sir Chhotu Ram

Government College for Women, Sampla,

Rohtak, Haryana, India

2

Institute of Management Studies and

Research, Maharshi Dayanand University,

Rohtak, Haryana, India

Correspondence

Naresh Kumar, Institute of Management

Studies and Research, Maharshi Dayanand

University, Rohtak, Haryana, India.

Email: nkimsar@gmail.com

The aim of the study is to investigate the dynamics of link between supporting role

of BRICS governments in promoting economic growth through entrepreneurship.

This paper employs 15 years annual time series data (2004–2018) for five BRICS

countries: Brazil, Russia, India, China and South Africa. The study is based on second-

ary data collected from World Development Indicators (WDI), Global Entrepreneur-

ship Monitor (GEM), Worldwide Governance Indicators (WGI), and Global

Entrepreneurship and Development Institute (GEDI). The study revealed that institu-

tional factors (government effectiveness, domestic credit, and perception about

opportunities) have an optimistic and considerable impact on entrepreneurial activi-

ties in BRICS countries and combination of these three is important to sustainability

of the business in today's dynamic environment. Further, ease to access the physical

resources, corruption, and public utilities have negative impact on entrepreneurship

in these economies. The study also explored that entrepreneurial activities have con-

structive and noteworthy impact on economic growth in BRICS nations. An entrepre-

neurial ecosystem is required within each country to sustain novel, dynamic, and

swiftly mounting new ventures. The study is unique as it elucidated the significant

role of government effectiveness, role of domestic credit, perception about opportu-

nities, ease to access the physical resources, and corruption in promoting the entre-

preneurial culture in BRICS economies. Additionally, the study also clarified the

imperative function of entrepreneurial activities in overall growth of BRICS

economies.

KEYWORDS

BRICS economies, corruption, domestic credit, economic growth, entrepreneurial activities,

government effectiveness

1|INTRODUCTION

Entrepreneurship is believed to be a vital instrument for socio-

economic development with the help of innovation, job creation, and

social wellbeing effects (Acs & Audretsch, 1988; Schumpeter, 1934).

Entrepreneurship and new technology are fundamental to the move-

ment of the economic system from managerial to entrepreneurial cap-

italism (Acs & Szerb, 2007). Entrepreneurship is characterized by

innovative behavior of people toward creating value to the society or

spreading out of economic activities by recognizing and take

advantage of new opportunities with the help of new products, pro-

cess innovation, creating new service, creating new customer base,

hence alleviating the pain of consumer and creating additional utility

to the consumer by offering better services. In modern era, entrepre-

neurship research has diverse approaches and outlooks. Schumpeter's

writings provide an artistic and creative analysis of strategic features

of innovation and entrepreneurship in the process of economic

change. Entrepreneurial activities provide foundation for big-business

capitalism. Entrepreneurial activities affect wage and interest rates in

the economy and create fundamental input for boom and depression

Received: 8 September 2020 Revised: 12 June 2021 Accepted: 2 August 2021

DOI: 10.1002/pa.2741

J Public Affairs. 2022;22(Suppl. 1):e2741. wileyonlinelibrary.com/journal/pa © 2021 John Wiley & Sons Ltd. 1of12

https://doi.org/10.1002/pa.2741