Capital Controls, Entrepreneurship and Economic Growth in Selected Developing Countries

Abstract

This paper presents the role of capital controls in the relationship between entrepreneurship and economic growth in developing countries. Data of forty-four (44) developing countries for the period of 2005-2014 were sourced and analysed using panel generalized method of moments and two stage least square. The result revealed that entrepreneurship had a robust, positive and significant effect on economic growth. In addition, the study confirmed that the intensity of capital controls matter could further strengthen the relationship between entrepreneurship and economic growth in developing countries. These results were not only consistent with intuition and experience, but also with empirical findings of the previous studies. Theoretically, it confirmed the view of Keynesian economists that promote the use of capital controls in an economy.