Our article aims to identify the key factors that affect the establishment of new businesses in 18 developed and emerging member countries in the European Union over the period 2003–2015. Using panel-data estimation techniques, we alternatively assess the effects of some macroeconomic, demographic, individual, and business environment-related factors on the dynamics of new firm creation, proxied by the rates of nascent entrepreneurship and entrepreneurial intentions. The results show that macroeconomic and demographic variables are the most significant determinants, followed by the individual characteristics of potential entrepreneurs and of the business environment. In addition, the sovereign debt crisis in Europe in 2010 positively affected entrepreneurship through increased support for new firms by individual country governments and the European Union.

Besides their common link with unemployment, unemployment benefits are also relevant to the decision to become an entrepreneur. We thoroughly explored this relationship for a panel of 23 EU countries over the period 2001–2019. Our results demonstrate that generous unemployment compensations hinder entrepreneurial initiative, and those opportunity entrepreneurs, who are more likely to create new jobs and innovation, are affected more. Contrary to common belief, we find an unequal pattern of effects, with higher benefits being more detrimental at the beginning of the unemployment spell. A favourable policy framework results in being relevant for entrepreneurial endeavours on its own; in addition, high-quality policies and programmes for entrepreneurs are found to temper the negative effects of large unemployment benefits on new business creation during long unemployment spells. Our results support the call for properly designed unemployment benefit systems (as both level and time pattern) that ensure an optimum balance between adequate income replacement and poverty prevention, on the one hand, and limited side effects on new venture creation, on the other hand.

The recent European sovereign debt crisis proved public debt issues should not be easily approached. While, prior to the crisis, public debt was of little concern in most of the developed European countries, as there had been no recent episodes of sovereign default, the crisis revived longtime forgotten memories. It once again proved that, although at different debt levels, just like the developing countries the developed ones should fear high public debts and that public debt is almost always a two-sided story: although public indebtedness can promote economic growth, especially when debt resources are used for financing public investment expenditure, when the debt is very high it can negatively affect economic growth. Against this background, in this paper we aim to study the relationship between public debt and economic growth for a panel of 33 European countries (28 European Union Member States and 5 candidate countries to European accession) over the period 1990-2011. More specifically, we investigate if there is evidence of a non-linear (quadratic) relationship, both for the entire European countries group and for the developed and developing countries subgroups. The main sources of data are World Bank’s World Development Indicators and International Monetary Fund’s World Economic Outlook and Historical Public Debt datasets. The results of our study confirm the existence of a „U inverted” relationship, with a maximum debt threshold of about 94% of GDP. After this threshold public debt is expected to negatively affect the economic growth rate, due to higher interest rates, fear of public debt unsustainability and severe budgetary consolidation measures. However, this threshold is found to be more than twice lower in developing European countries compared to the developed ones, as the former enjoy lower credibility, higher vulnerability to shocks and depend more on external capital transfers.

This paper examines the interplay between formal and informal institutions in driving new business creation across 44 emerging and frontier economies. Specifically, using data from 2006 to 2021, it explores how tax rates, fiscal administrative burdens, and corruption interact to influence the registration of new companies. We reveal that higher corporate taxes stifle entrepreneurship by reducing after-tax profits and incentivizing informality, whereas higher labor taxes, counterintuitively, boost new business entry by altering individuals’ occupational choices. Complex tax administration procedures create a ‘bottleneck’ effect, discouraging business registration and underscoring the need for streamlined processes. Interestingly, corruption plays a double-edged role: while it generally ‘sands the wheels’ of new business creation, it can also ease the burden of tax administration, aligning with the ‘grease the wheels’ theory. To promote formal business creation as a key driver of economic growth, governments in emerging economies should adopt a balanced approach by simplifying fiscal procedures while strengthening their efforts to tackle corruption.

Public debt plays a major role in financing projects that support economic growth and sustainable development. As governments may choose between domestic and external borrowing, a comprehensive assessment of their effects would support this choice. Our study provides an integrative view of economic and social outcomes and compares, through externalities, the impacts of external and domestic public debt as methods of financing development, with a focus on the Cameroonian economy. Utilizing a dynamic computable general equilibrium (CGE) model and a microsimulation analysis, we find that domestic debt has more advantages for Cameroon compared to external debt, as it increases the large-scale economic impact by improving household welfare, boosting GDP growth, and progressively reducing poverty and inequality. It is therefore recommended that the Cameroonian government focus on increasing the use of domestic debt as a method of financing development by implementing policies that support domestic saving and promote the development of domestic debt markets.