The Impact of Private Sector Job Freedom and Human Capital on Entrepreneurship: The Case of Brics Countries

Private sector business freedom and human capital are the fundamental building blocks of the entrepreneurial ecosystem. Business freedom provides entrepreneurs with the necessary space and opportunities, while human capital provides the knowledge and skills to make the most of these opportunities. Both factors are critical for economic growth, innovation and social welfare. The aim of this study is to determine the causality relationships between private sector job freedom, human capital and entrepreneurship for selected BRICS countries for the period 2002-2023 with the help of Emirmahmutoğlu and Köse (2011) causality test. According to the results of the analysis, unidirectional causality from entrepreneurship to private sector business freedom is determined for the panel. On the other hand, for the country level, unidirectional causality from entrepreneurship to private sector business freedom is found in Brazil, China, South Africa and Russia. Moreover, bidirectional causality was found between GIRSM and BSER at the panel level. At the country level, there is bidirectional causality between BSER and GIRSM for Brazil, China and South Africa, unidirectional causality from GIRSM to BSER for Russia, and no causality for India. Societies that want to encourage entrepreneurship should develop policies to increase business freedom and invest in education and development programs to strengthen human capital.