Challenges of entrepreneurship development in Europe in the light of the pandemic crisis
Abstract
The paper aims to perform an objective comparative analysis of the business climate for entrepreneurship development in European countries in 2021 and group them according to the quality of the business climate. The research uses thirteen criteria from the Global Entrepreneurship Monitor report and TOPSIS methodology combined with entropy to perform a comparative analysis of the business climate for entrepreneurship development in selected European economies in 2021. Usage of TOPSIS and entropy method based on the last available data enabled objective and the most accurate evaluation and ranking of countries, taking into account all observed criteria. According to the study, the ranking of European economies indicates that the Netherlands has the most favorable business climate for entrepreneurship development, considering all observed criteria, while Belarus is ranked in the last position. According to relative closeness to the ideal solution (Ci*), the four clusters of countries are derived. Besides the Netherlands, Lithuania, Norway, and Finland were also dedicated to the first cluster, indicating that these economies obtained the most favorable conditions for entrepreneurship development during the pandemic crisis. On the other hand, former command economies and Greece and Cyprus are placed in Cluster IV since they haven’t supported entrepreneurs with sufficient and appropriate economic policy and regulatory reforms.
Keyword : entrepreneurship, business climate, European countries, COVID-19, TOPSIS
How to Cite
Remeikienė, R., Gasparėnienė, L., Fedajev, A., Arsić, S., & Noga, G. (2023). Challenges of entrepreneurship development in Europe in the light of the pandemic crisis. Journal of Business Economics and Management, 24(2), 354–367. https://doi.org/10.3846/jbem.2023.18612
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Hwang, C. L., & Yoon, K. (1981). Multiple attribute decision making. Methods and applications a state-of-the-art survey. Springer Verlag. https://doi.org/10.1007/978-3-642-48318-9
Iwuoha, V. C., & Aniche, E. T. (2020). Covid-19 lockdown and physical distancing policies are elitist: Towards an indigenous (Afro-centred) approach to containing the pandemic in sub-urban slums in Nigeria. Local Environment, 25(8), 631–640. https://doi.org/10.1080/13549839.2020.1801618
Juergensen, J., Guimón, J., & Narula, R. (2020). European SMEs amidst the COVID-19 crisis: Assessing impact and policy responses. Journal of Industrial and Business Economics, 47(3), 499–510. https://doi.org/10.1007/s40812-020-00169-4
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Koç, B. (2021). The probable effects of COVID-19 on entrepreneurial trends and SMEs in the tourism and hospitality industry. Journal of Tourism and Gastronomy Studies, 9(3), 1522–1535. https://doi.org/10.21325/jotags.2021.852
Kuckertz, A., Brändle, L., Gaudig, A., Hinderer, S., Morales Reyes, C. A., Prochotta, A., Steinbrink, K. M., & Berger, E. S. (2020). Start-ups in times of crisis – A rapid response to the COVID-19 pandemic. Journal of Business Venturing Insights, 13, e00169. https://doi.org/10.1016/j.jbvi.2020.e00169
Magableh, G. M., & Mistarihi, M. Z. (2022). Applications of MCDM approach (ANP-TOPSIS) to evaluate supply chain solutions in the context of COVID-19. Heliyon, 8(3), e09062. https://doi.org/10.1016/j.heliyon.2022.e09062
Mandviwalla, M., & Flanagan, R. (2021). Small business digital transformation in the context of the pandemic. European Journal of Information Systems, 30(4), 359–375. https://doi.org/10.1080/0960085X.2021.1891004
Mohammed, A. H. A. (2022). SMEs’ sustainable development challenges post-COVID-19: The tourism sector. World Journal of Entrepreneurship, Management and Sustainable Development, 18(3), 407–424.
Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., Agha, M., & Agha, R. (2020). The socio-economic implications of the coronavirus pandemic (COVID-19): A review. International Journal of Surgery, 78, 185–193. https://doi.org/10.1016/j.ijsu.2020.04.018
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Pitoyo, A. J., Aditya, B., Amri, I., & Rokhim, A. A. (2021). Impacts and strategies behind COVID-19 – Induced economic crisis: Evidence from informal economy. The Indian Journal of Labour Economics, 64(3), 641–661. https://doi.org/10.1007/s41027-021-00333-x
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Rahim, R., Supiyandi, S., Siahaan, A. P. U., Listyorini, T., Utomo, A. P., Triyanto, W. A., Irawan, Y., Aisyah, S., Khairani, M., Sundari, S., & Khairunnisa, K. (2018). TOPSIS method application for decision support system in internal control for selecting best employees. Journal of Physics: Conference Series, 1028, 012052. https://doi.org/10.1088/1742-6596/1028/1/012052
Shannon, C. E. (1948). A mathematical theory of communication. The Bell System Technical Journal, 27(3), 379–423. https://doi.org/10.1002/j.1538-7305.1948.tb01338.x
Shinozaki, S., & Rao, L. N. (2021). COVID-19 impact on micro, small, and medium-sized enterprises under the lockdown: Evidence from a rapid survey in the Philippines (ADBI Working Paper 1216). Asian Development Bank Institute, Tokyo. https://doi.org/10.2139/ssrn.3807080
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Tomasso, F. D. (2020). The new Italian legislation on corporate governance and business crisis. The impact of COVID-19 on SMEs and the recent rules to mitigate the effects. Financial Markets, Institutions and Risks, 4(4), 91–108. http://doi.org/10.21272/fmir.4(4).91-108.2020
Wang, Y., Liu, P., & Yao, Y. (2022). BMW-TOPSIS: A generalized TOPSIS model based on three-way decision. Information Sciences, 607, 799–818. https://doi.org/10.1016/j.ins.2022.06.018
Zahra, S. A. (2021). International entrepreneurship in the post Covid world. Journal of World Business, 56(1), 101143. https://doi.org/10.1016/j.jwb.2020.101143
Zavadskas, K. E., Antucheviciene, J., & Chatterjee, P. (2019). Multiple-criteria decision-making (MCDM) techniques for business processes information management. Information, 10(1), 4. https://doi.org/10.3390/info10010004
Aghion, P. (2017). Entrepreneurship and growth: Lessons from an intellectual journey. Small Business Economics, 48(1), 9–24. https://doi.org/10.1007/s11187-016-9812-z
Ahsany, F., Alamsyah, A. F., & Al-Fatih, S. (2020). Legal protection of labour rights during the coronavirus disease 2019 (COVID-19) pandemic. Jurnal Pembaharuan Hukum, 7(2), 100–115. https://doi.org/10.26532/jph.v7i2.10975
Antonides, G., & van Leeuwen, E. (2021). Covid-19 crisis in the Netherlands:“Only together we can control Corona”. Mind & Society, 20(2), 201–207. https://doi.org/10.1007/s11299-020-00257-x
Arsić, S., & Gajić, M. (2021, November). Industry 4.0: Assessing the level of advanced digital technologies in the EU countries using integrated Entropy-TOPSIS methods. In International Scientific Conference “UNITECH 2021” (pp. II-133–II-138), Gabrovo, Bulgaria.
Arsić, S., Nikolic, Dj., & Jevtic, M. (2020). An investigation of the usability of image-based CAPTCHAs using PROMETHEE-GAIA method. Multimedia Tools and Applications, 80(6), 9393–9409. https://doi.org/10.1007/s11042-020-10054-w
Bartik, A. W., Bertrand, M., Cullen, Z., Glaeser, E. L., Luca, M., & Stanton, C. (2020). The impact of COVID-19 on small business outcomes and expectations. Proceedings of the National Academy of Sciences, 117(30), 17656–17666. https://doi.org/10.1073/pnas.2006991117
Belghitar, Y., Moro, A., & Radić, N. (2022). When the rainy day is the worst hurricane ever: The effects of governmental policies on SMEs during COVID-19. Small Business Economics, 58(2), 943–961. https://doi.org/10.1007/s11187-021-00510-8
Chakraborty, S. (2022). TOPSIS and modified TOPSIS: A comparative analysis. Decision Analytics Journal, 2, 100021. https://doi.org/10.1016/j.dajour.2021.100021
Chede, S. J., Adavadkar, B. R., Patil, A. S., Chhatriwala, H. K., & Keswani, M. P. (2021). Material selection for design of powered hand truck using TOPSIS. International Journal of Industrial and Systems Engineering, 39(2), 236–246. https://doi.org/10.1504/IJISE.2021.118257
Cincotta, P. M., Giordano, C. M., Silva, R. A., & Beaugé, C. (2021). The Shannon entropy: An efficient indicator of dynamical stability. Physica D: Nonlinear Phenomena, 417, 132816. https://doi.org/10.1016/j.physd.2020.132816
COVID-19 – Consumer Law Research Group. (2020). Consumer law and policy relating to change of circumstances due to the COVID-19 pandemic. Journal of Consumer Policy, 43, 437–450. https://doi.org/10.1007/s10603-020-09463-z
Donthu, N., & Gustafsson, A. (2020). Effects of COVID-19 on business and research. Journal of Business Research, 117, 284–289. https://doi.org/10.1016/j.jbusres.2020.06.008
Dwivedi, P. P., & Sharma, D. K. (2022). Application of Shannon Entropy and COCOSO techniques to analyze performance of sustainable development goals: The case of the Indian Union Territories. Results in Engineering, 14, 100416. https://doi.org/10.1016/j.rineng.2022.100416
Galindo-Martín, M. Á., Castaño-Martínez, M. S., & Méndez-Picazo, M. T. (2021). Effects of the pandemic crisis on entrepreneurship and sustainable development. Journal of Business Research, 137, 345–353. https://doi.org/10.1016/j.jbusres.2021.08.053
Ghazy, N., Ghoneim, H., & Lang, G. (2022). Entrepreneurship, productivity and digitalization: Evidence from the EU. Technology in Society, 70, 102052. https://doi.org/10.1016/j.techsoc.2022.102052
Govil, N., & Sharma, A. (2022). Validation of agile methodology as ideal software development process using Fuzzy-TOPSIS method. Advances in Engineering Software, 168, 103125. https://doi.org/10.1016/j.advengsoft.2022.103125
Groenewegen, J., Hardeman, S., & Stam, E. (2021). Does COVID-19 state aid reach the right firms? COVID-19 state aid, turnover expectations, uncertainty and management practices. Journal of Business Venturing Insights, 16, e00262. https://doi.org/10.1016/j.jbvi.2021.e00262
Gubik, A. S. (2021). Entrepreneurial career: Factors influencing the decision of Hungarian students. Entrepreneurial Business and Economics Review, 9(3), 43–58. https://doi.org/10.15678/EBER.2021.090303
Hill, S., Ionescu-Somers, A., Coduras, A., Guerrero, M., Roomi, M. A., Bosma, N., Sahasranamam, S., & Shay, J. (2022). Global Entrepreneurship Monitor 2021/2022 global report: Opportunity Amid Disruption. In Expo 2020 Dubai. https://www.gemconsortium.org/report/gem-20202021-global-report
Hwang, C. L., & Yoon, K. (1981). Multiple attribute decision making. Methods and applications a state-of-the-art survey. Springer Verlag. https://doi.org/10.1007/978-3-642-48318-9
Iwuoha, V. C., & Aniche, E. T. (2020). Covid-19 lockdown and physical distancing policies are elitist: Towards an indigenous (Afro-centred) approach to containing the pandemic in sub-urban slums in Nigeria. Local Environment, 25(8), 631–640. https://doi.org/10.1080/13549839.2020.1801618
Juergensen, J., Guimón, J., & Narula, R. (2020). European SMEs amidst the COVID-19 crisis: Assessing impact and policy responses. Journal of Industrial and Business Economics, 47(3), 499–510. https://doi.org/10.1007/s40812-020-00169-4
Kelley, D., & Wright, F. (2020). COVID-19 impacts on entrepreneurship: United States. In Diagnosing COVID-19 impacts on entrepreneurship (pp. 26–32). London Business School.
Koç, B. (2021). The probable effects of COVID-19 on entrepreneurial trends and SMEs in the tourism and hospitality industry. Journal of Tourism and Gastronomy Studies, 9(3), 1522–1535. https://doi.org/10.21325/jotags.2021.852
Kuckertz, A., Brändle, L., Gaudig, A., Hinderer, S., Morales Reyes, C. A., Prochotta, A., Steinbrink, K. M., & Berger, E. S. (2020). Start-ups in times of crisis – A rapid response to the COVID-19 pandemic. Journal of Business Venturing Insights, 13, e00169. https://doi.org/10.1016/j.jbvi.2020.e00169
Magableh, G. M., & Mistarihi, M. Z. (2022). Applications of MCDM approach (ANP-TOPSIS) to evaluate supply chain solutions in the context of COVID-19. Heliyon, 8(3), e09062. https://doi.org/10.1016/j.heliyon.2022.e09062
Mandviwalla, M., & Flanagan, R. (2021). Small business digital transformation in the context of the pandemic. European Journal of Information Systems, 30(4), 359–375. https://doi.org/10.1080/0960085X.2021.1891004
Mohammed, A. H. A. (2022). SMEs’ sustainable development challenges post-COVID-19: The tourism sector. World Journal of Entrepreneurship, Management and Sustainable Development, 18(3), 407–424.
Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, A., Iosifidis, C., Agha, M., & Agha, R. (2020). The socio-economic implications of the coronavirus pandemic (COVID-19): A review. International Journal of Surgery, 78, 185–193. https://doi.org/10.1016/j.ijsu.2020.04.018
OECD. (2020). Coronavirus (COVID-19): SME policy responses. OECD Policy Responses to Coronavirus (COVID-19). Retrieved July 06, 2022, from https://www.oecd.org/coronavirus/policy-responses/coronavirus-covid-19-sme-policy-responses-04440101/
Ozili, P. K., & Arun, T. (2023). Spillover of COVID-19: Impact on the Global Economy. In U. Akkucuk (Ed.), Managing inflation and supply chain disruptions in the global economy (pp. 41–61). IGI Global. https://doi.org/10.4018/978-1-6684-5876-1.ch004
Partlova, P. (2021). Business potential of rural areas as a tool of stability and development of small and medium-sized enterprises. Transformations in Business & Economics, 20(3), 223–237.
Petrakis, P. E., Valsamis, D. G., & Kafka, K. I. (2020). Economic growth and development policy. Springer Books. https://doi.org/10.1007/978-3-030-43181-5
Pitoyo, A. J., Aditya, B., Amri, I., & Rokhim, A. A. (2021). Impacts and strategies behind COVID-19 – Induced economic crisis: Evidence from informal economy. The Indian Journal of Labour Economics, 64(3), 641–661. https://doi.org/10.1007/s41027-021-00333-x
Radulescu, M., Fedajev, A., & Nikolic, Dj. (2017). Ranking of EU national banking systems using multi-criteria analysis in the light of BREXIT. Acta Oeconomica, 67(4), 473–509. https://doi.org/10.1556/032.2017.67.4.1
Rahim, R., Supiyandi, S., Siahaan, A. P. U., Listyorini, T., Utomo, A. P., Triyanto, W. A., Irawan, Y., Aisyah, S., Khairani, M., Sundari, S., & Khairunnisa, K. (2018). TOPSIS method application for decision support system in internal control for selecting best employees. Journal of Physics: Conference Series, 1028, 012052. https://doi.org/10.1088/1742-6596/1028/1/012052
Shannon, C. E. (1948). A mathematical theory of communication. The Bell System Technical Journal, 27(3), 379–423. https://doi.org/10.1002/j.1538-7305.1948.tb01338.x
Shinozaki, S., & Rao, L. N. (2021). COVID-19 impact on micro, small, and medium-sized enterprises under the lockdown: Evidence from a rapid survey in the Philippines (ADBI Working Paper 1216). Asian Development Bank Institute, Tokyo. https://doi.org/10.2139/ssrn.3807080
Tofan, M., Bercu, A.-M., & Roman, A. (2016). Entrepreneurship dynamics in EU: A comparative perspective. Transformations in Business and Economics, 15(3), 431–451. https://etalpykla.lituanistikadb.lt/object/LT-LDB-0001:J.04~2016~1581434519108/J.04~2016~1581434519108.pdf
Tomasso, F. D. (2020). The new Italian legislation on corporate governance and business crisis. The impact of COVID-19 on SMEs and the recent rules to mitigate the effects. Financial Markets, Institutions and Risks, 4(4), 91–108. http://doi.org/10.21272/fmir.4(4).91-108.2020
Wang, Y., Liu, P., & Yao, Y. (2022). BMW-TOPSIS: A generalized TOPSIS model based on three-way decision. Information Sciences, 607, 799–818. https://doi.org/10.1016/j.ins.2022.06.018
Zahra, S. A. (2021). International entrepreneurship in the post Covid world. Journal of World Business, 56(1), 101143. https://doi.org/10.1016/j.jwb.2020.101143
Zavadskas, K. E., Antucheviciene, J., & Chatterjee, P. (2019). Multiple-criteria decision-making (MCDM) techniques for business processes information management. Information, 10(1), 4. https://doi.org/10.3390/info10010004