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The moderating role of governmental support in the relationship between entrepreneurship and economic growth: A study on the GCC countries

Maria Saberi (Department of Management and Marketing, Ahlia University, College of Business and Finance, Manama, Bahrain)
Allam Hamdan (Department of Accounting and Economics, Ahlia University, College of Business and Finance, Manama, Bahrain)

Journal of Entrepreneurship in Emerging Economies

ISSN: 2053-4604

Article publication date: 25 October 2018

Issue publication date: 22 May 2019

2037

Abstract

Purpose

The purpose of this paper is to find out the extent to which governments of the Gulf Cooperation Council (GCC) countries play a moderating role in the relationship between entrepreneurship and economic growth.

Design/methodology/approach

The study uses a 10-year time series (2006-2015) for six GCC countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates. Secondary sources of data were collected from The World Bank database, general available statistics on the GCC, the Global Entrepreneurship Index from the Global Entrepreneurship and Development Institute (GEDI) and the Global Entrepreneurship Monitor (GEM) database.

Findings

Results indicate that governmental support has a significant moderating effect on the relationship between entrepreneurship and economic growth in the GCC. Furthermore, the strongest indicators of entrepreneurial investments in the Gulf have been found to be risk capital and high growth, which indicate a rapid growth in entrepreneurial investments. The lowest scoring indicators were found to be technology absorption and innovation process.

Research limitations/implications

Despite the necessary measures taken to assure standard results such as testing data validity, care should be taken when generalizing the research results mainly because the time series of the study (2006-2015) could have been affected by the International and Financial Crisis, though the study has taken this into consideration.

Originality/value

This study has clarified the significant role of GCC governments in moderating the relationship between entrepreneurship and economic growth. Thus, the findings of this study are important because they help the GCC governments recognize their significant role and hence to utilize this role by supporting new and existing entrepreneurs particularly through regulatory quality, risk capital, technology absorption and process innovation. Furthermore, this study proves the extent to which entrepreneurship can help enhance the GCC economic growth, hence elaborating the importance of the sustainable resource, such as the human capital, in achieving diversification of sources to move from an oil-based to a more diversified economy.

Keywords

Acknowledgements

The authors wish to thank the Ahlia University for all the support given to the research activity, and special thanks to the founder Professor Abdulla Yusuf Al Hawaj and the president Professor Mansoor Ahmed Alaali. We would like also to thank the Editor Professor Jun Li from University of Essex, UK, anonymous reviewers for their comments and suggestions.

Citation

Saberi, M. and Hamdan, A. (2019), "The moderating role of governmental support in the relationship between entrepreneurship and economic growth: A study on the GCC countries", Journal of Entrepreneurship in Emerging Economies, Vol. 11 No. 2, pp. 200-216. https://doi.org/10.1108/JEEE-10-2017-0072

Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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