Do national and entrepreneurial framework conditions influence economic growth? : Using path analysis (PA) on the example of Nordic countries between the years 2005-2014

Abstract: This paper investigates whether national and entrepreneurial framework conditions positively affect economic growth via its effects on entrepreneurial activity more significantly than via its effects on technological innovation intensity1 . The revised GEM conceptual model is tested for a sample of Nordic countries (Norway, Finland, Sweden, Denmark, Iceland), between the years 2005-2014, using path analysis. The variables representing national and entrepreneurial framework conditions, entrepreneurial activity, technological innovation intensity and economic growth are Global Competitiveness Index (which includes also number of procedures to start a business and number of days to start a business, venture capital availability etc.), selfemployed workers (expressed as % of total employed), RD expenditures (expressed as % of GDP) and GDP per capita. In each of the models, the author finds out a positive effect of national and entrepreneurial framework conditions. The hypotheses stating the positive indirect influence of national and entrepreneurial framework conditions on economic growth via entrepreneurial activity (H1) and the positive indirect influence of national and entrepreneurial framework conditions via technological innovation intensity (H2) have been accepted. The calculated total effect on economic growth indicates that the path via entrepreneurship (H1) is more significant (H3).