Feedback effects of Entrepreneurship, Innovation,and Economic Development: Empirical evidence from selected MENA Countries

Proceedings of The World Conference on Management and Economics

Year: 2019


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Feedback effects of Entrepreneurship, Innovation, and Economic Development: Empirical evidence from selected MENA Countries

Samir Maliki and Abdelhadi Benghalem




Entrepreneurship and innovation have become essential for the growth and development of organizations in all sectors, not only in developed countries but also in developing countries, which often face a variety of socio-economic problems. This article aims to explore the relationship between three variables: entrepreneurship, innovation and economic development in eight MENA countries (Algeria, Morocco, Egypt, Tunisia, Turkey, Jordan, United Arab Emirates, and Saudi Arabia) and to show if there is a feedback effect. We estimate three balanced panel data equations with the fixed and random effects methodology for the period 2006-2017. The results show that several factors have a positive effect on innovation and entrepreneurship, including money supply and per capita income. In addition, there is a feedback effect between entrepreneurship and innovation, so that innovation facilitates the creation of new businesses and entrepreneurship generates more innovations because of competitiveness. But this combination is still ineffective in promoting growth in the MENA region, which is explained by another result: legal entrepreneurship has a significant negative impact on economic development. This impact is discussed through other factors in our analysis, such as institutional contexts, entrepreneurship-innovation management, the type of entrepreneur and the sector in which it operates.

Keywords: entrepreneurship, innovation, economic development, MENA countries.