Conclusions
Entrepreneurship has been cited as one of the solutions to meet future challenges such as climate change. Despite the fact that policy makers place great importance on entrepreneurship in promoting sustainable and inclusive development, the links between them are unclear. This paper sets out to explore the conditions where entrepreneurship can simultaneously achieve economic growth and advance social and environmental objectives in Africa. More precisely, we have tried to provide a better understanding of the central and critical roles of entrepreneurship, innovation, and institutions in moving toward a sustainable future in Africa. Using Genuine Saving (GS) as a measure of sustainability, we built an MEKC model to examine the interrelationship between innovation, institutional quality, entrepreneurship, and sustainable development in 17 African countries over the period 2001–2014. Our empirical analyses provide interesting findings with regard to the sustainability process, which have important policy implications. First, we found that both forms of entrepreneurship activity in Africa (i.e., formal and informal) contribute to environmental degradation, where the contribution of informal entrepreneurship to environmental degradation is much higher compared to formal entrepreneurship. However, after taking account of innovation and institutional variables in the analysis, the effects of both forms of entrepreneurship on sustainability turned positive, meaning that a higher level of innovation and better quality of institutions constitute a driving force to achieve a higher level of entrepreneurship and sustainability. Our findings have important policy implications. Improved governance and law enforcement are needed in most of African countries to achieve sustainable development. Several international development agencies are encouraging such reforms.
