Correlation of Income Inequality and Entrepreneurial Activity

Authors

1 Department of Marketing, management and entrepreneurship, V.N. Karazin Kharkiv National University, Kharkiv, Ukraine

2 Department of International Е-Commerce and Hotel&Restaurant Business, V.N. Karazin Kharkiv National University, Kharkiv, Ukraine

3 Department of Management innovative entrepreneurship and international economic relations, National Technical University «Kharkiv Polytechnic Institute», Kharkiv, Ukraine.

4 Mayor, Municipal Office Gromadka, Gromadka, Poland

Abstract

The fact of growth of inequality in distribution of income both inside the national economies and between the countries is confirmed by many empirical studies. In particular, these are annual reports of the World Bank, UNIDO and European Commission. The growth of inequality in distribution of income causes social tension inside the countries and promotes conflicts between the countries. Entrepreneurship serves as a form of softening social tension. Entrepreneurial activity ensures a significant percentage of employment and self-employment in many countries providing the income of the population at the level above the minimum consumption rate. In some cases, entrepreneurship could serve as a social lift for transition to a higher level of income distribution.
The goal of this article is a statistical check of dependence between the level of income inequality and entrepreneurial activity in countries with different levels of GDP. A system approach and correlation analysis are used as the study methods.
The statistical check of a correlation between the Gini index and level of entrepreneurial activity showed significant differences in the correlation degree of the said indicators for different countries and time periods. An assumption was made that there is a statistical dependence between the indicators, however, inclusion of additional parameters, among which we can find inequality of the property distribution and the level of institutional support of entrepreneurship, is required.

Graphical Abstract

Correlation of Income Inequality and Entrepreneurial Activity

Keywords

References

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Journal of Optimization in Industrial Engineering
Volume 14, Special Issue - Serial Number 29
Winter and Spring 2021
Pages 33-38

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