The effect of training and the macroeconomic environment on the business discontinuation rate in startups

Abstract

This study aimed to examine the effect of training of entrepreneurial and macroeconomic factors such as interest rate ،economic growth rate and GDP per capita on the rate of business discontinuation on sample of 54 countries included in the 2017 Global Entrepreneurship Monitor report. The results revealed that macroeconomic variables, mainly the rate of interest ،and economic growth are the most important variables impact on the rate of discontinuation business ،and not per capita GDP. The results indicated that the rate of interest positively affects the discontinuation business and statistically significant, while the rate of economic growth negatively affects the discontinuation business and statistically significant. The results also indicated that the training negatively affects the rate of the discontinuation business and it statistically significant. The explanation is that the higher of economic growth rate and entrepreneurial training in a country ،the lower the level of discontinuation business. In other words ،countries with higher levels of entrepreneurial training ،economic growth ،and a lower interest rate on borrowing will see more enterprise turning from startups stage into existent phase. Decision makers will have to grow their economies and adopt specialized training programs that will help entrepreneurs acquire the skills they need to ensure a stronger transition from startups to existent ones.