Abstract:

The level of economic freedom which is expressed as institutions and policies based on market economy is one of the most significant indicators of entrepreneurial activities since the increase in economic freedom has caused a decrease in transaction costs preventing the entrepreneurial activity. The aim of this study is to analyze the effect of economic freedom on entrepreneurship in Islamic countries by using the data belonging to years between 1995 and 2019. In the study, self-employment rate has been used as entrepreneurial criterion; gross domestic product per capita, money supply, import and inflation have been used as the indicators of the entrepreneurship; economic freedom index presented by The Heritage Foundation and its 9 subcomponents out of 12 (property rights, government integrity, government spending, tax burden, business freedom, monetary freedom, trade freedom, investment freedom and financial freedom) have been used as the economic freedom criterion. According to the findings of this study, entrepreneurship has been affected positively by economic freedom and property rights, government integrity, government spending, monetary freedom, investment freedom and financial freedom and negatively by tax burden and trade freedom.

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