Does Financial Development and Improved Institutions Really Advance Formal Entrepreneurship in Developing Countries?

Luc Nembot Ndeffo, Daave Franklin Mvogo II Ossede, Gautier Tchoffo Tameko
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Abstract

To effectively combat poverty worldwide, many development policies place particular emphasis on entrepreneurship, thanks to its ability to drive economic growth. However, there is the challenge of reducing the informal sector and promoting the formal sector. Many initiatives have therefore, been undertaken to promote formal entrepreneurship in developing countries, but little is known about the role of institutions and financial development. The aim of this article is to analyze the effects of financial development and institutions on formal entrepreneurship in developing countries. To achieve this, the system GMM method was applied to a sample of 94 developing countries between 2006 and 2018. It yielded the following results: financial development has a positive effect on formal entrepreneurship; institutions have mixed effects on formal entrepreneurship; institutions encourage financial development to foster formal entrepreneurship; and, other macroeconomic magnitudess have mixed effects. The study recommends that the leaders of these countries develop their financial systems, fight corruption more effectively, reduce regulatory constraints on business start-ups and encourage the achievement of economic policy objectives, in order to expand the size of the formal sector.
金融发展和机构完善真的能促进发展中国家的正规创业吗?
为了在全球范围内有效消除贫困,许多发展政策都特别强调创业精神,因为创业精神能够推动经济增长。然而,减少非正规经济部门、促进正规经济部门的发展是一项挑战。因此,发展中国家采取了许多措施来促进正规创业,但对机构和金融发展的作用却知之甚少。本文旨在分析金融发展和机构对发展中国家正规创业的影响。为此,本文对 2006 年至 2018 年间 94 个发展中国家的样本采用了系统 GMM 方法。研究得出以下结果:金融发展对正规创业具有积极影响;制度对正规创业具有混合影响;制度鼓励金融发展以促进正规创业;其他宏观经济幅度具有混合影响。研究建议这些国家的领导人发展金融体系,更有效地打击腐败,减少对创业的监管限制,鼓励实现经济政策目标,以扩大正规部门的规模。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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