The Level of Economic Development as a Factor of Entrepreneurial activity

Entrepreneurship is the driving force of all changes taking place within the market system. In this regard, the relationship between entrepreneurial activity and the level of economic development is particularly relevant at the moment. Since it is quite logical that in developed economies, where there are more opportunities and resources for starting a business, the level of entrepreneurial activity should be higher than in developing economies. However, in reality, the opposite is true. It is this fact that has been the subject of debate for a long time. This discrepancy in the level of entrepreneurial activity is related to the population's motivation to start a business. There are two types of entrepreneurial motivation: voluntary and forced. Understanding entrepreneurial motivation provides useful insights into the quality of early entrepreneurial activity in any economy. The purpose of this paper is to identify the impact of economic development of countries on the level of entrepreneurial activity. To do so, data from the Global Entrepreneurship Monitor (GEM) website were collected and analyzed. Three panel data models were constructed for four dependent variables: the level of early stage entrepreneurial activity (TEA); the motivation index; the share of voluntary entrepreneurs and the share of involuntary entrepreneurs. The results of the analysis revealed a statistically significant relationship between GDP and the dependent variables.