Does the Entrepreneurial Activity Enhance the National Innovative Capacity?

Innovation and entrepreneurship represent two important pillars of the economic growth. However, the analysis of their interaction is scarce in the literature. This paper considers the role of entrepreneurial activity in strengthening the national innovative capacity. While the innovative capacity is assess based on the Global Innovation Index, the entrepreneurial activity is measured using the Global Entrepreneurship Monitor data. We conduct a panel data analysis for 34 developed and developing countries, for the period 2009-2012. Our results show that the overall entrepreneurial activity does not influence the national innovative capacity, either its output component. However, the role of opportunity-driven entrepreneurs is positive and very significant in enhancing innovation, in both cases. The findings confirm the theoretical hypothesis and contribute to the literature of innovation's determinants, highlighting the role of entrepreneurship at macro-level.