Technology-based ventures and sustainable development: Cointegrating and causal relationships with a panel data approach

Abstract

The aim of this article is to provide new empirical evidence on the causality between proxy variables of technology entrepreneurship and proxy variable of sustainable economic performance in a vector error correction model. It covers a sample of 13 countries participated to Global Entrepreneurship Monitor studies under the period 2002–2013. Building on a theoretical background that considers the adoption of new technologies through a dynamic process of creative destruction based on innovation as the most important factor for achieving long-term economic growth, the empirical investigation uses robust econometric techniques that are capable of estimating long-run cointegrating relationships in panel data.

Our results support the idea that total entrepreneurship activity related to the technology sector leads to improve the sustainability of a nation in the long run. More importantly, our paper helps understand the nature of liaison between the creation of innovative and high-technology business and the presence of favorable social and environmental conditions for the well-being of a population.

Keywords:

• technology entrepreneurship
• sustainable economic growth
• GEM
• cointegration tests
• vector error correction model

JEL Classification:

• C32
• M13
• Q01

Acknowledgements

This research has received funding from the Global Entrepreneurship Research Association (GERA), London Business School, Regents Park, London NW1 4SA, UK.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. High technology: aerospace, computers, office machinery, electronics communications, pharmaceuticals, scientific instruments. Medium--high technology: motor vehicles, electrical machinery, chemicals, other transport equipment, non-electrical machinery. Medium--low technology: rubber and plastic products, shipbuilding, other manufacturing, non-ferrous metals, non-metallic mineral products, fabricated metal products, petroleum refining, ferrous metals.

2. Countries belong to the Group of Twelve or G12 which is a group of industrially advanced countries whose central banks co-operate to regulate international finance.

3. Detailed calculation descriptions and definitions can be found in Bolt, Matete, and Clemens (2002), Hamilton (2006) or World Bank (2011).

Additional information

Funding

Global Entrepreneurship Research Association (GERA).