The Long-Run Effects of Export Diversification and Industrialization on Entrepreneurship in Selected Developing Countries
Keywords:
export diversification, entrepreneurship, developing countries, industrializationAbstract
This study aims to analyze the long-term effects of export diversification and industrialization on entrepreneurship in selected developing Asian countries with relatively high human development indices. The study employs panel data from 2006 to 2023 and applies FMOLS and DOLS econometric techniques to estimate the long-run effects of globalization variables (export diversification and foreign direct investment), demographic variables (urbanization and labor force), and economic development variables (industrialization and human capital) on entrepreneurship across selected developing countries. The estimation results confirm a significant long-run relationship among all variables. Both FMOLS and DOLS coefficients reveal that export diversification, foreign direct investment, urbanization, labor force, industrialization, and human capital each positively and significantly affect entrepreneurship. Labor force participation and human capital exhibited the strongest elasticities, while export diversification stimulated competitive innovation and the emergence of new businesses. Export diversification and industrialization play a critical role in enhancing entrepreneurship through innovation, employment, and increased access to productive resources and global markets. Policymakers in developing nations are encouraged to prioritize industrial expansion, attract foreign investment, and foster human capital development as essential strategies to stimulate sustainable entrepreneurial growth.
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