LAUSR

Received February 14, 2020 Revised from March 16, 2020 Accepted May 17, 2020 Available online September 15, 2020 Purpose: The major concentrating area of our study is to contribute to the existing literature of entrepreneurial activities related to the social business entrepreneurship by considering the business freedom of the entrepreneurs of the Russian Federation, where how Gross National Income per capita and Industry value added per worker influence the business freedom of the social business entrepreneurship in the short-run and long-run. Design/methodology/approach: The Vector Error Correction Model (VECM) helps us measuring the short-run and long-run association among business freedom, Gross National Income per capita, and industry value added per worker during years 1995-2018. We apply the VECM for appropriate econometric specification when the endogenous variables are cointegrated. In the VECM, we have differenced the equation and include an error-correction term measuring the deviation of the previous period from long-run equilibrium. Findings: While considering log of business freedom index as the dependent variable in VECM, the results show that in the short run log of Gross National Income per capita and the log of industry value added per worker do not influence business freedom indexes. However, the corresponding Pvalue of the cointegrating equation is statistically significant in the short run at the 1 % significant level. In the long-run, the log of Gross National Income per capita negatively observes the business freedom index. The industry value added per worker has a positive effect on the business freedom index statistically significant at the 1 % level. There is no autocorrelation, the errors are normally distributed, and specification imposes 2-unit moduli. Research/practical implications: We believe that our investigation will additionally support and become an encouragement issue for improving business conditions for the established and new social business entrepreneurs in the Russian Federation and other countries as well. Our study will encourage future researchers for further engagement in entrepreneurial activity. Originality/value: Empirically, the study will encourage local entrepreneurship by engaging in entrepreneurial activity towards a positive change. JEL classification: