In a Search for Contemporary Growth Drivers: Does Public Healthcare Entrepreneurship Affect Economic Growth?

Abstract

Entrepreneurship has been long recognized as an essential driver of economic growth. It is widely accepted that entrepreneurship increases innovation, firm formation, employment, and overall GDP. Despite the increasing research on both public entrepreneurship and entrepreneurship in healthcare, these different research areas have not been combined that much. To fill this research gap, this paper analyses whether public healthcare entrepreneurship influences economic growth. This study exploits the WHO Global Health Observatory database approximating various dimensions of entrepreneurship by specific aspects of compliance with international healthcare regulation. The study uses data for 170 countries from 2010 to 2019. Using the fixed effect panel setting, it tests whether improvements in public healthcare entrepreneurship (PHE) affect a country's economic growth. The results suggest that higher entrepreneurial orientation in public healthcare is associated with larger effects on output per capita, which is channelled through productivity. However, after reaching certain level of PHE development, the contributions to growth start diminishing. The findings from this paper produce several implications. First, by exploring the nexus between public entrepreneurship and healthcare entrepreneurship it introduces the concept of public healthcare entrepreneurship explaining its theoretical and empirical importance. It further provides empirical and quantitative support to the view that developing public healthcare entrepreneurship plays a role in achieving a higher output per effective worker. Thereby, this study provides evidence of a non-linear relationship between public healthcare entrepreneurship and growth. Finally, given the statistical and economic significance of the results, these findings motivate policymakers to consider developing policies that guide developing entrepreneurial orientation within public healthcare. We believe this is possibly the first study that considers entrepreneurial orientation withing a public sector into the economic growth discussion.