The promotion of policies and initiatives that
support job creation through entrepreneurship in developing countries is at the
heart of the 2030 sustainable development goals (SDG) agenda, and, in
particular, SDG 8 and 9. Yet, entrepreneurship remains an abstract concept difficult
to define and comprehend, and the literature on entrepreneurship has been
developed mostly in a developed country context. In the current global context,
dominated by the dramatic impact of the COVID-19 pandemic, the relevant
policies to be adopted by developing countries to face the socioeconomic
consequences of the pandemic must be identified and analyzed. One of the main
concerns of these policies is unemployment. The simultaneous supply and demand
shocks caused by the pandemic have raised calls for an unprecedented level of
public intervention in both developing and developed countries to prevent
massive unemployment and chains of bankruptcies. The objective of this paper is
to study the role of entrepreneurship in job preservation or job creation at
the macroeconomic level. After reviewing different taxonomies of
entrepreneurship and discussing motivations of entrepreneurs in a developing
country context, the fundamental relationship between entrepreneurship, job
creation, and macroeconomic performance in developing countries in both the
pre- and post-COVID-19 contexts is analyzed. Using panel data for a sample of
24 countries members of the Organization of Islamic Cooperation (OIC) across
the period 2009-2018, the paper demonstrates a U-shaped relationship between
entrepreneurship and the level of economic development of nations, which
translates into a negative correlation between economic growth and
entrepreneurial dynamism for developing countries with per capita income below
a certain limit. This proves that different phases of the economic cycle
require different policies and promotion of entrepreneurship should therefore
be adjusted to the economic conditions of each country.
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