The mediating effect of entrepreneurship on financial support and economic growth in African emerging economies

Abstract

PurposeThe aim of the research is to examine in depth the relationship between financial support, entrepreneurship and economic growth in emerging African economies.Design/methodology/approachThe study adopts the system-generalized methods of moments (sys-GMM) technique for data analysis and hypothesis testing on a sample of 34 African emerging economies (340 observations) from 2010 to 2019.FindingsThe results show that there is significant positive correlation between financial support, entrepreneurship, and economic growth. Moreover, entrepreneurship served as a partial mediator between financial support and economic growth in African emerging economies.Practical implicationsThis research suggests that African governments should focus on entrepreneurial systems, which are essentially networks driven by the pursuit of individual opportunities and the promotion of new business creation; and introduce other forms of financial assistance, such as loans, loan guarantees, interest subsidies, technical assistance, insurance, etc.Originality/valueThe main novelty of the paper is that the authors empirically investigate the mediating role of entrepreneurship in the association between financial support and economic growth in 34 African emerging economies.