Environmental Entrepreneurship and Inclusive Growth: A Three-fold Approach to Analysis

Abstract

: This article assesses the contribution of entrepreneurs to inclusive growth, and explores both the determinants and impact of environmental entrepreneurs on pollution emissions. Firstly, we use a dynamic linear panel model to quantify the impact of various types of entrepreneurship on inclusive growth proxied by real household expenditure growth. Though there is no significant direct effect on inclusive growth, entrepreneurship appears to be more important in developing countries. Secondly, using a random effects model, we consider entrepreneurs’ role in pollution-reduction efforts. We find that entrepreneurs have contributed positively to carbon dioxide emissions. This effect, however, decreases with the level of development, suggesting that improving institutional quality is the key to promoting environmental entrepreneurship capable of making a difference to climate change. Finally, we use a hierarchical probit model to identify the key determinants of environmental entrepreneurship for individual entrepreneurs. Surprisingly, we find that high environmental pressure is associated with a lower probability of becoming an environmental entrepreneur.