Does Trade Openness Affect Global Entrepreneurship Development? Evidence from BRICS Countries

Md. Mominur Rahman (), Bishawjit Chandra Deb (), Muhammad Shajib Rahman (), M. M. Mofiz Uddin (), Muhammad Ramzan (), Mohammad Jubair Hossain () and Gias Uddin ()
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Bishawjit Chandra Deb: Department of Accounting & Information Systems, Comilla University, Cumilla-3506, Bangladesh
Muhammad Shajib Rahman: Department of Accounting & Information Systems, Comilla University, Cumilla-3506, Bangladesh
M. M. Mofiz Uddin: Department of Business Administration, Northern University Bangladesh, Dhaka-1213, Bangladesh
Muhammad Ramzan: School of International Trade and Economics, Shandong University of Finance and Economics, Shandong, P. R. China
Mohammad Jubair Hossain: Department of Accounting & Information Systems, Comilla University, Cumilla-3506, Bangladesh
Gias Uddin: Department of Accounting & Information Systems, Comilla University, Cumilla-3506, Bangladesh

Annals of Financial Economics (AFE), 2023, vol. 18, issue 03, 1-33

Abstract: Emerging nations focus more on new and innovative business activities across national borders for economic advancement. Further, trade openness has recently emerged in BRICS countries. Thus, global entrepreneurship development can be a great opportunity for the traded open countries. In line with this, the study aims to examine the impact of trade openness on global entrepreneurship development in BRICS countries. The study collected balanced-panel data from BRICS countries for 2001–2020 and applied random-effects estimation to analyze the data. The study drives a cross-sectional dependence test, unit root test, and model specification test before applying the estimated model. The study further checked the robustness of the findings by alternative estimation methods like FMOLS and DOLS and found similar results. The results revealed that trade openness positively influences global entrepreneurship development, but average tariffs can discourage entrepreneurs. Specifically, trade openness through trade spread, trade freedom, and average tariffs increase the total early-stage entrepreneurial activities and entrepreneurial intentions rate in BRICS countries. Through cross-country analysis, the study found that trade openness significantly enhances global entrepreneurship development in Brazil, India, China, and South Africa rather than in Russia. The study found similar results after checking the robustness of the findings by alternative estimation methods like FMOLS and DOLS. Thus, the findings could be a great insight for the policymakers of BRICS countries. Governments, academics, international entrepreneurs, etc., can use the findings in future decisions as a policy dialogue.

Keywords: Trade openness; entrepreneurship; BRICS; international trade; global entrepreneurship (search for similar items in EconPapers)
JEL-codes: B27 F1 F43 F6 F64 L26 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S201049522350001X

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