ESTIMATE THE IMPACT OF ENTREPRENEURSHIP ON ECONOMIC GROWTH IN EGYPT BY GRANGER CAUSALITY

Abstract

The current study aimed to analyze and measure the impact of entrepreneurship on economic growth in the Middle East and North Africa region, focusing on Egypt during the period (2008-2023). Through the descriptive analysis approach and the econometric approach based on the Engel and Granger methodology and Granger causality, it was found that entrepreneurship and innovation have a positive role in enhancing employment opportunities and reducing unemployment rates, especially youth unemployment, theoretically and in previous studies. Despite some development, the Egyptian economy still faces many challenges, including (the lack of a precise definition of the nature of an entrepreneur, the lack of development of the business environment, the lack of accurate data, the lack of commercial and marketing information, the lack of interest in entrepreneurial education, the absence of structural transformation, the increase in stagflation, changes in the exchange rate, the growing polarization in the labor market, the weak participation of women in the labor market, and the low investment in human capital). Using the least squares method, it was found that there is a positive impact of entrepreneurship on economic growth in Egypt during the period (2008-2023). Using the joint integration model through the Engel-Granger methodology, which showed the absence of an integration relationship between the study variables. The causality test showed a causal relationship in one direction from the early-stage entrepreneurship index to economic growth. The study suggests the importance of paying attention to entrepreneurial education, financing it, and setting the necessary laws for it, while enhancing the role of universities, schools, and the media in spreading the culture of entrepreneurship.