Does Entrepreneurial Activity Assist in the Alleviation of Poverty?

Abstract

Poverty is a major issue across the world with governments and organizations such as the World Bank and the IMF increasingly looking for ways to reduce its impact. Despite this, almost 2.5 billion people still live in poverty. Entrepreneurial Activity can reduce poverty and can be boosted through the help of Entrepreneurship Facilitators such as Government, Incubators, and Financial Institutions. This study examines the relationship between Entrepreneurial Activity and poverty alleviation using Feasible Generalized Least Square (FGLS). The study found a positive and significant relationship between Entrepreneurial Activity and poverty alleviation as measured by the changes in Human Development Index (HDI) in all 104 countries studied over a 12 year period, and that the presence of good Entrepreneurial Facilitators improves the capacity of Entrepreneurial Activity. It suggests that governments need better business related regulations to motivate entrepreneurs and create ease of doing business.