The Relationship between Entrepreneurial Activity and Income Inequality: A Comparative Analysis of “Good Entrepreneurial Framework Conditions” Group and “Poor Entrepreneurial Framework Conditions” Group

The Relationship between Entrepreneurial Activity and Income Inequality: A Comparative Analysis of “Good Entrepreneurial Framework Conditions” Group and “Poor Entrepreneurial Framework Conditions” Group | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article The Relationship between Entrepreneurial Activity and Income Inequality: A Comparative Analysis of “Good Entrepreneurial Framework Conditions” Group and “Poor Entrepreneurial Framework Conditions” Group Wanling Wang This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8359994/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Entrepreneurial activity exerts a complex influence on income inequality, contingent upon the surrounding entrepreneurship conditions. Using an unbalanced panel of 78 countries from 2002 to 2018, this study investigates how total and motive-specific entrepreneurial activities, namely opportunity-based (OEA), high-expectation (HEA), and necessity-based (NEA), affect income inequality. Both static fixed-effects and dynamic GMM estimations are applied, using the Gini coefficient and Decile Dispersion Ratio to ensure robustness. Results show that overall entrepreneurial activity is negatively associated with income inequality in countries with poor entrepreneurial frameworks but positively associated in those with good entrepreneurial frameworks. When disaggregated by motivation, OEA consistently reduces inequality across all samples, while HEA tend to exacerbate inequality, particularly in economies with favorable entrepreneurship conditions. These findings challenge policies that promote entrepreneurship as a driver of income equality. In economies characterized by well-developed entrepreneurial ecosystems, policymakers should acknowledge that indiscriminate promotion of entrepreneurship may inadvertently exacerbate income disparities. Instead, targeted investments in education and skills development are likely to produce more equitable and sustainable outcomes. Conversely, in countries with less developed entrepreneurial frameworks, broad encouragement of entrepreneurial activity can stimulate job creation and help alleviate inequality. Overall, the results emphasize the necessity of aligning entrepreneurship policies with prevailing structural and institutional conditions to ensure that entrepreneurial dynamism fosters inclusive and sustainable economic growth. Entrepreneurial activity Income inequality Fixed effects Gini index System GMM Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8359994","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":566388198,"identity":"4689b08b-70ef-48ff-8188-ac9a7f6cee71","order_by":0,"name":"Wanling 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Group\u003c/p\u003e","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Entrepreneurial activity, Income inequality, Fixed effects, Gini index, System 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Using an unbalanced panel of 78 countries from 2002 to 2018, this study investigates how total and motive-specific entrepreneurial activities, namely opportunity-based (OEA), high-expectation (HEA), and necessity-based (NEA), affect income inequality. Both static fixed-effects and dynamic GMM estimations are applied, using the Gini coefficient and Decile Dispersion Ratio to ensure robustness.\u003c/p\u003e \u003cp\u003eResults show that overall entrepreneurial activity is negatively associated with income inequality in countries with poor entrepreneurial frameworks but positively associated in those with good entrepreneurial frameworks. When disaggregated by motivation, OEA consistently reduces inequality across all samples, while HEA tend to exacerbate inequality, particularly in economies with favorable entrepreneurship conditions.\u003c/p\u003e \u003cp\u003eThese findings challenge policies that promote entrepreneurship as a driver of income equality. In economies characterized by well-developed entrepreneurial ecosystems, policymakers should acknowledge that indiscriminate promotion of entrepreneurship may inadvertently exacerbate income disparities. Instead, targeted investments in education and skills development are likely to produce more equitable and sustainable outcomes. Conversely, in countries with less developed entrepreneurial frameworks, broad encouragement of entrepreneurial activity can stimulate job creation and help alleviate inequality. 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