Business dynamism in the world economy

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The creation and growth of new enterprises and, on the other hand, their decline and market exit are crucial factors of business dynamism and economic growth. Thus, business dynamism is an important aspect in the market chain and productivity of an economy, as well as a trigger for market reforms. The aim is to analyze business dynamism using Global Competitiveness Index 4.0 and its variables worldwide and to verify the relationship between business dynamism in the EU states and economic characteristics such as Valued added at factor cost, Enterprise Birth Rate and Enterprise Death Rate. Data were collected from the 2019 Global Competitiveness Report and from the EUROSTAT database, using the most recently updated source for each indicator. The 11th pillar of the Global Competitiveness Index, focused on business dynamics, and a set of indicators were analyzed using PCA to verify if all the variables are effective representatives of the concept. It was found out that the pillar does not effectively represent the concept of business dynamism in case of the EU countries; therefore the new pillar was constructed. A strong and statistically significant correlation between business dynamism and Value Added was confirmed. A relationship between business dynamism and other economic indicators was not proven. From a territorial point of view, Oceania achieved the best overall result in the analyzed field. The process of starting a new business is the most challenging in terms of start-up costs in South America. By contrast, the EU has reached the best result in this process.

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    • Figure 1. Comparison of business dynamism in the world.
    • Table 1. Comparison of Pillar 11 in countries in seven geographical areas
    • Table 2. Rotated component matrix of Pillar 11 of the Global Competitiveness Index
    • Table 3. Component matrix of Own Index
    • Table 4. Correlations of business dynamism and economic indicators
    • Conceptualization
      Zuzana Virglerova, Eliska Zapletalikova
    • Project administration
      Zuzana Virglerova
    • Writing – original draft
      Zuzana Virglerova, Felice Addeo, Eliska Zapletalikova
    • Writing – review & editing
      Zuzana Virglerova, Eliska Zapletalikova
    • Data curation
      Felice Addeo
    • Formal Analysis
      Felice Addeo
    • Methodology
      Felice Addeo
    • Investigation
      Felice Addeo
    • Validation
      Felice Addeo
    • Visualization
      Eliska Zapletalikova