Motivating Entrepreneurial Activity in the MENA Region: Do Human Capital and Corruption Matter?

Since the time of Schumpeter, entrepreneurship has been strongly associated with positive economic development. His primary contribution stems from his core theory that ‘entrepreneurship is the engine of national economic growth'. But not all entrepreneurship creates a positive impact on the economy. Thus, it is important to develop a deep understanding of the business climate that leads entrepreneurial activity to foster economic growth. This article delves into the role of human capital (HC) and corruption (CPI) in developing the type of entrepreneurial climate that leads to economic growth. Using data gathered from the Global Entrepreneurship Monitor (GEM), the World Bank and various NGO data sites, this article conducts an empirical investigation of the impact of human capital (HC) and corruption (CPI) on the overall level of the total entrepreneurial activity (TEA) and follows this by further studying the impact of these antecedent factors on the disaggregated levels of total entrepreneurial activity; opportunity-motivated entrepreneurial activity (OME) and necessity-motivated entrepreneurial activity (NME)