A Panel Threshold Model to Capture the Nonlinear Nexus between Public Policy and Entrepreneurial Activities in EU Countries
This paper explores the relationship between public policy and entrepreneurial activity in EU countries by using the panel threshold model. The paper was fundamental based on and confirmed the psychological threshold theory; namely, the results showed a single threshold effect between government eff...
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-04-01
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| Series: | Mathematics |
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| Online Access: | https://www.mdpi.com/2227-7390/10/8/1265 |
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| author | Oana-Ramona Lobonț Ana-Cristina Nicolescu Florin Costea Zheng-Zheng Li Alexandra-Mădălina Țăran Adriana Davidescu |
| author_facet | Oana-Ramona Lobonț Ana-Cristina Nicolescu Florin Costea Zheng-Zheng Li Alexandra-Mădălina Țăran Adriana Davidescu |
| author_sort | Oana-Ramona Lobonț |
| collection | DOAJ |
| description | This paper explores the relationship between public policy and entrepreneurial activity in EU countries by using the panel threshold model. The paper was fundamental based on and confirmed the psychological threshold theory; namely, the results showed a single threshold effect between government effectiveness and entrepreneurial activity. Government public policy boosts entrepreneurial activity at the first segment, but the promotion effect becomes relatively slow after the threshold value. When separating the EU countries into efficiency-driven and innovation-driven countries, the threshold effect only existed in innovation-driven countries. After the threshold value, governance effectiveness hindered entrepreneurial activity, because saturation and excessive regulations impeded business in these countries. In essence, it is not a matter of working harder or winding down but a matter of promoting a moderate public policy, which is indeed necessary for the government to encourage entrepreneurial activity. Ultimately, keeping economic growth stable is essential for a favorable entrepreneurial environment. |
| first_indexed | 2024-03-09T13:21:00Z |
| format | Article |
| id | doaj.art-0624d423129844cc82658e109920d9bc |
| institution | Directory Open Access Journal |
| issn | 2227-7390 |
| language | English |
| last_indexed | 2024-03-09T13:21:00Z |
| publishDate | 2022-04-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Mathematics |
| spelling | doaj.art-0624d423129844cc82658e109920d9bc2023-11-30T21:29:18ZengMDPI AGMathematics2227-73902022-04-01108126510.3390/math10081265A Panel Threshold Model to Capture the Nonlinear Nexus between Public Policy and Entrepreneurial Activities in EU CountriesOana-Ramona Lobonț0Ana-Cristina Nicolescu1Florin Costea2Zheng-Zheng Li3Alexandra-Mădălina Țăran4Adriana Davidescu5Finance Department, Faculty of Economics and Business Administration, West University of Timisoara, 300223 Timișoara, RomaniaFinance Department, Faculty of Economics and Business Administration, West University of Timisoara, 300223 Timișoara, RomaniaDoctoral School of Economics and Business Administration, West University of Timisoara, 300223 Timișoara, RomaniaSchool of Economics, Qingdao University, Qingdao 266071, ChinaDoctoral School of Economics and Business Administration, West University of Timisoara, 300223 Timișoara, RomaniaDepartment of Statistics and Econometrics, Bucharest University of Economic Studies, 010374 Bucharest, RomaniaThis paper explores the relationship between public policy and entrepreneurial activity in EU countries by using the panel threshold model. The paper was fundamental based on and confirmed the psychological threshold theory; namely, the results showed a single threshold effect between government effectiveness and entrepreneurial activity. Government public policy boosts entrepreneurial activity at the first segment, but the promotion effect becomes relatively slow after the threshold value. When separating the EU countries into efficiency-driven and innovation-driven countries, the threshold effect only existed in innovation-driven countries. After the threshold value, governance effectiveness hindered entrepreneurial activity, because saturation and excessive regulations impeded business in these countries. In essence, it is not a matter of working harder or winding down but a matter of promoting a moderate public policy, which is indeed necessary for the government to encourage entrepreneurial activity. Ultimately, keeping economic growth stable is essential for a favorable entrepreneurial environment.https://www.mdpi.com/2227-7390/10/8/1265public policygovernment effectivenessentrepreneurial activityEU countries |
| spellingShingle | Oana-Ramona Lobonț Ana-Cristina Nicolescu Florin Costea Zheng-Zheng Li Alexandra-Mădălina Țăran Adriana Davidescu A Panel Threshold Model to Capture the Nonlinear Nexus between Public Policy and Entrepreneurial Activities in EU Countries Mathematics public policy government effectiveness entrepreneurial activity EU countries |
| title | A Panel Threshold Model to Capture the Nonlinear Nexus between Public Policy and Entrepreneurial Activities in EU Countries |
| title_full | A Panel Threshold Model to Capture the Nonlinear Nexus between Public Policy and Entrepreneurial Activities in EU Countries |
| title_fullStr | A Panel Threshold Model to Capture the Nonlinear Nexus between Public Policy and Entrepreneurial Activities in EU Countries |
| title_full_unstemmed | A Panel Threshold Model to Capture the Nonlinear Nexus between Public Policy and Entrepreneurial Activities in EU Countries |
| title_short | A Panel Threshold Model to Capture the Nonlinear Nexus between Public Policy and Entrepreneurial Activities in EU Countries |
| title_sort | panel threshold model to capture the nonlinear nexus between public policy and entrepreneurial activities in eu countries |
| topic | public policy government effectiveness entrepreneurial activity EU countries |
| url | https://www.mdpi.com/2227-7390/10/8/1265 |
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