Poverty is one of the main issues faced by countries across the world. Over the last three decades, governments and international organizations such as the World Bank, the IMF, etc. have been trying to reduce poverty. Despite this, today almost 2.5 billion people are still living in poverty. Entrepreneurship is often seen as a way to reduce poverty. Moreover, the role of entrepreneurship facilitators is very important in creating a suitable business environment for entrepreneurs which increases the capacity of entrepreneurial activities. The purpose of this thesis is to provide an insight into how entrepreneurial activity and entrepreneurship facilitators (Government, Incubators, and Financial Institutions) help in improving the business environment in all countries and hence in poverty alleviation, examining the impact in case of high-income, high medium-income, medium-income, low-income countries and, as a result, reduce poverty. To investigate this, the Human Development Index (HDI) has been used to measure poverty. Secondary data for Entrepreneurship (Entrepreneurial Facilitators, Entrepreneurial Activities, and Economic Factors) and Poverty (HDI)) from the period of 2005 to 2016 are used for high-income countries, high medium-income countries, medium-income countries and low-income countries.
The study has found that there is a positive and significant relationship between entrepreneurial activity and the changes in Human Development Index (HDI) in all countries studied over the 12 years period. It also finds that the presence of good entrepreneurial facilitators improves the capacity of entrepreneurial activity which reduces poverty as measured by the HDI. It adds to the body of knowledge by using HDI as a new tool to analyze the impact of entrepreneurial activity country wise. It also suggests that governments need to make better business related regulations which will motivate entrepreneurs and create ease of business doing. Finally it suggests that trade openness bring foreign investments in a country which create employment for people.