Macroeconomic Factors and Entrepreneurship in Nigeria

Provision of conducives environment to enhance the supply and sustainability of entrepreneurs has developed into a field of competition among countries of the world. In this respect, macroeconomic factors such as FBI, technology, power generation, trade openness etc are enhanced to boost entrepreneurship in a country. Thus, this study is designed to investigate the impact of those macroeconomic factors to entrepreneurship in Nigeria. Secondary data from World Bank data bank between 2006-2015 were used for the study and analyzed using STATA package. The Regression output revealed that most Nigerian macroeconomic factors have insignificant impact on the development of entrepreneurship in the country. It was therefore, recommended that, policy makers should pay attention to not only the volume of the macroeconomic factors but also their rhythm with entrepreneurship in the country.


Introduction
Entrepreneurship is gradually becoming the target of individuals, firms and governments, especially with the increasing effect of unemployment and competition world over. On the side of individual and government, day-by-day, it is becoming apparently clear that, governments cannot provide jobs all their citizens, even in the developed economies like United State (US) talkless of developing ones, therefore, they must both recourse to entrepreneurship (Luke, Verreynne & Kearins, 2007). Competition has also presented firms with an unprecedented challenges, where non-entrepreneurial businesses being wiped out of the market by the entrepreneurial ones. As such, breeding young entrepreneurs stands as a promising gesture that, an economy will in a short while be ready to compete at regional and global market and dominate there. Thus, economic growth and development in this modern day, largely depend on entrepreneurial propensity of that economy. One of the alternatives in for government to take steps towards igniting entrepreneurial motivation in the economy. Literatures havedivided entrepreneurial motivations into pull and push factors. Pull factor are internal to the individual himself, risk taking habit, internal locus of control, need for achievement and passion for work.
Push factors are externally driven factors mainly consist of macroeconomic factors such astechnology, trade openness, unemployment, human capital, cost of registering new business, cost of doing business, internationalization and capital formation (Driessen and Zwart, 2006). Therefore,supply of entrepreneurship is a result of both individual level factors and general economic factors. It therefore follows, that, policy makers can encourage entrepreneurship, by improving macroeconomic factors that affectentrepreneurs,through reforms that mayact to push for entrepreneurship (Khader, Rajan and Sen, 2014).
In Nigeria, just like in the traditional studies of entrepreneurship, it is always conceptualizeddetermine macroeconomic factors and be determined by pull factors alone. This view is account for, by heavy reliance solely on entrepreneurship theories that positioned entrepreneur as a mighty being, whichdetermines all economic factors but not being determined by any. Of recent, other economic theories are being used to explain how a number of macroeconomic factors determine entrepreneurship. Such studies are very limited on Nigerian economy, both in number and width and breath in terms of analysis and variable inclusion. Thus, this study is designed to test the impact of macroeconomic factors on entrepreneurship in Nigeria.
The study is guided by these hypotheses: H 01 : Technology has no significant impact on entrepreneurship in Nigeria H 02 : power generation has no significant impact on entrepreneurship in Nigeria H 03 : trade openness has no significant impact on entrepreneurship in Nigeria H 04 : unemployment has no significant impact on entrepreneurship in Nigeria H 05 : lending interest rste has no significant impact on entrepreneurship in Nigeria The subsequent sections of the paper are: section (ii) which discussed literature review and theoretical framework, then section (iii) discussed research methodology. Data analysis and result are the trust of section (iv), then section (v) finally discussed conclusions and recommendations.

Concept of Entrepreneurship
Entrepreneurship is now a multidimensional concept as it has defined from different perspective. Some researchers look at entrepreneurship from the economics view, sociology and psychology, others look at it from the management perspective, while others look at it from the social perspective, yet most researchers and practitioners looked at it from economic and management persfectives (Hannah, Orwa & Bula, 2012).According to Praag, Mirijam and Hans (1995), Richard Cantillon was the first economist to acknowledge the entrepreneur as a key economic factor in his posthumous "Essai sur la nature du commerce en general" first published in Cantillon's entrepreneur is an individual that equilibrates supply and demand in the economy and in this function bears risk or uncertainty. Say (1767-1832) regarded entrepreneur as a manager of a firm. Schumpeter defines entrepreneur as innovator who identify a new economic opportunity and the subsequently introduction of new ideas in the market (Bosma, Praag & Wit, 2000).

Macroeconomic Factors and Entrepreneurship in Nigeria
Other researchers identified supply of financial capital, innovation, allocation of resources among alternative uses and decision-making as functions of an entrepreneur. Entrepreneurs identify opportunities, assemble required resources, implement a practical action plan, and harvest the reward in a timely, flexible way (Kirzner, 1997). These definitions have one thing in common, ie entrepreneur create business by taking risk of providing capital to test a newly conceived business idea through a planned allocation of resources. Therefore, it can follow that, entrepreneurship is establishing a new business. In this regard, Okeke, and Okechukwu (2014) argued that the most obvious form of entrepreneurship is that of starting new businesses.

Macroeconomic Determinants of Entrepreneurship
Cala, Arauzo-Carod andManjón-Antolín, (2015) argued that determinants of new business formation can be seen from the perspectives of cross-country, country specific and industrydeterminants. Durowoju (2014) observed that, as the world is overwhelmed by technological change, liberalization, outsourcing, and restructuring to rule business enterprises, limited financing and support; inadequate infrastructure, insecurity and lack of training/vocational facilities are believed to be responsible for slow business creation and growth in many economies. Thus, one can say technological change, liberalization, outsourcing, and restructuring to rule business enterprises are determinants from international perspective, while limited financing and support; inadequate infrastructure, insecurity and lack of training/vocational facilities are from determinants from the country perspective.
Some researchers also put those factors in their own words, example, Grieco (2007) puts them as market opportunities to earn profits, industry and timing specific structural features, presence of signals concerning market conditions, environmental contingences related to prices, taxes and wages. In line with this, Amat, Renart and García, (2014) outlined internationalization, finance, innovation and quality.
Romero and Martínez-Román, (2012) External Environment characteristics: Knowledge spillovers, university system and R&D institutions, regulation and public support measures From the forgoing, it is observed that, GDP, technology, trade openness, unemployment, human capital, cost of registering new business, cost of doing business, internationalization and capital formation are the main determinants of entrepreneurship in an economy.

Review of Studies on Environmental Factors and Entrepreneurship
GDP, technology, trade openness, unemployment, human capital, cost of registering new business, cost of doing business,internationalization,interest rate and capital formation were examined at different number and economies, using different type of data and having different resultsKhader, Rajan and Sen, (2014) examined GDP, business density, unemployment, interest rates and internet users in 110 countries of the world using data from World Bank, they found interest rate, access to internet and GDP per capita are the only significant determining determinants of entrepreneurship. Thereby,they tested five out of ten and found only three to be significant. Kadocsa and Francsovics (2011) found Capital formation, export and Financing having significant impact on entrepreneurship in Hungerian economy. Amat,Renart and García,(2014)investigated factors responsible for business growth in Spainusing data from 250 Catalonian businesses. It was found that quality, innovation,

Macroeconomic Factors and Entrepreneurship in Nigeria
A Y Dutse and Ibrahim Aliyu 42 internationalization and finance were shown to influence business growth and sustainability over time. Hájek, Nekolová, and Novosák, (2015) found entrepreneurship in the form of new business formation is positively associated with the quality of human capital, number of foreign owned businesses, quality of entrepreneurial climate in Czech Republic also with a data from World Bank.
Ogunro, (2014)  From the above, it can be seen how these economic indices were under researched in Nigerian economy.
Another gap is how most of the researches relied on primary data which made them to draw conclusions on the economy based on results from a very small domain in the economy. This study intends to study the impact of GDP, technology, trade openness, power supply, unemployment, human capital, cost of registering new business, cost of doing business,internationalization, capital formation and, interest rate on entrepreneurship in Nigeria using secondary data.

Theoretical Framework
This study is anchored on Simple Representative Agent Models developed by it argued that an economy consist of two representatives ie a representative firm and a representative consumer.It also went further to argue that these economic agents always seek optimize by maximizingsome objective subject to the constraints they face from a number of macroeconomic factors. They include: consumerspreferences, availability of technology, endowments of resources available to consumers and firms.
The rationale behind cross sectional design is to capture the relationship among the modeled variables over this specified period of time. The decision to take a startingyear as 2006 and ending at 2015 was based on recency and availability of data.

Source of Data
All the data used for the study, were secondary data from World Bank. The rationale behind this type of data was to cover the whole nation with a non-perceptual data.

Operationalization
i. Entrepreneurship: is operationalized as the number of new businesses registered. 43 ii. GDP was measure as GDP per capita but it has high correlation with Gross capita formation and cost of doing business, therefore was removed to avoid multicollinearity. Gross capita formation and cost of doing business were left because they have higher theoretical linkage with entrepreneurship than GDP.

A Y Dutse and Ibrahim Aliyu
iii. Power generation was measured on electric power consumption which is the production of power plants and combined heat and power plants less transmission, distribution, and transformation losses and own use by heat and power plants.
iv. Technology was also operationalized as ICT goods imports (% total goods imports) ieICT goods imports include computers and peripheral equipment, communication equipment, consumer electronic equipment, electronic components, and other information and technology goods v. Trade openness was measured onexternal balance on goods and services ie exports of goods and services minus imports of goods and services vi. Unemployment was defined as the share of the labor force that is without work but available for and seeking employment.
vii. Human capita = share of people with tertiary education in population over 15 years of age but had to be dropped because of unavailability of data.
viii. Cost to register new business Cost to register a business is normalized by presenting it as a percentage of gross national income (GNI) per capita.
ix. Capital formation was defined as gross capital formation which consists of outlays on additions to the fixed assets of the economy plus net changes in the level of inventories.
x. Interest rate is defined as lending interest rate ie bank rate that usually meets the short-and medium-term financing needs of the private sector. This rate is normally differentiated according to creditworthiness of borrowers and objectives of financing. The terms and conditions attached to these rates differ by country, however, limiting their comparability.
xi. Internationalization is measured by cost of export ie the fees levied on a 20-foot container in U.S. dollars.
All the fees associated with completing the procedures to export or import the goods are included.
These include costs for documents, administrative fees for customs clearance and technical control, customs broker fees, terminal handling charges and inland transport. The cost measure does not include tariffs or trade taxes. Only official costs are recorded.

Tool of Data Analysis
The data was analyzed using multiple linear regression analysis with STATA, to test the hypothesis about the impact of macroeconomic factors on entrepreneurship in Nigeria. This is because there are more oneindependent variables and entrepreneurship as dependent. As it can be seen from table 1, there is no evidence of multicollinearity (0.7 and above) between any two of the above five independent variable, therefore, they are all qualified to run for multiple regression (Sekaran and Bougie, 2010).  All the independents variables above have a less 0.9 coefficient of correlation with one another, therefore qualified for multiple regression.  The above result also shows an all through insignificant impact, with some impacts being positive as in the case of FDI, GDP, and COSR; while COSE, CAPF and COSS appeared to have negative impacts.

Macroeconomic Factors and Entrepreneurship in Nigeria
The issue of all-through insignificant results is less irritating than capital formation having a negative impact on entrepreneurship in an economy. It was therefore decided to test the impact of each variable on entrepreneurship in a simple linear regression and result in appendix A reveal that the negative impact of capital formation on entrepreneurship is a matter of mediation. Source: Researchers Computation, 2017

Macroeconomic Factors and Entrepreneurship in Nigeria
A Y Dutse and Ibrahim Aliyu 47 As it can be seen in the first table above when GDP was removed from the model, capital formation (CAPF) depict a positive coefficient but when GDP was added back, capital formation (CAPF) become negative again.
This means that GDP has a negative mediating effect in the relationship between capital formation and entrepreneurship.

5.1Findings
It is found that Macroeconomic factors are not good determinants of entrepreneurship in Nigeria as they have insignificant impacts on it.
It is also found that GDP has a negative mediating effect in the relationship between entrepreneurship and capital formation in the of additions outlays to the fixed assets of the economy such as land improvements, machinery and equipment purchases; and the construction of roads, railways, schools, offices, hospitals, private residential dwellings, and commercial and industrial buildings plus net changes in the level of inventories. This suggest that, these machineries and equipment are not produced by Nigerians, thereby, reduces the GDP when

Conclusion
Based on the above findings, it is concluded that, Nigerian macroeconomic environment is confused one and is not conducive for entrepreneurship. As such, any effort of government to encourage entrepreneurship through is will make little or no impact.

Recommendation
i. Policy makers should pay attention to not only the volumes macroeconomic indices, but also how rhymed are they to boosting entrepreneurship in the country.
ii. For the internationals, such as FDI and export, Nigeria should tactically renegotiate with her partners. This will deploy foreign investors to those sectors that have higher potential of buying and selling to Nigerians small business. It will also create market for Nigerian small businesses' products.
iii. Government should consider relaxing cost of export as it will ease marketing out of Nigerian small businesses' products.