The Moderating Role of Research and Development (R&D) Support in the Relationship between Entrepreneurship and per Capita Output—A Study on the GCC Countries

Abstract

The current study examines the moderating role of R&D expenditures by the government on the relationship between entrepreneurship and per capita output in GCC countries. Using secondary quantitative data, panel data analysis was conducted for six GCC countries (Saudi Arabia, Kuwait, Oman, Bahrain, Qatar, and UAE) based on their scores on the Global Entrepreneurship Index, Ease of Doing Business, and R&D expenditure as a percentage of GDP. Descriptive statistics and regression analysis were conducted using Eviews 12. The study found that a supportive business environment and entrepreneurship ecosystem can lead to higher per capita output and that laboratory force and capital are significant positive contributors to per capita output. However, both Ease of Doing Business and the Global Entrepreneurship Index have a significant negative impact on per capita output. The study did not find significant moderation of the relationship between entrepreneurship and per capita output by R&D expenditures. These findings have important implications for policy-makers and academia, emphasizing the significant labour force and capital for per capita output. Future research should explore the relationship between entrepreneurship and growth further and investigate the role of R&D. Policy recommendations include reducing regulatory burdens and providing tax incentives to create a supportive environment for entrepreneurship and increasing R&D funding to promote per capita output. Overall, this study contributes to the state of the art through examining the moderating role of R&D expenditures on the relationship between entrepreneurship and per capita output in the context of GCC countries.