Entrepreneurship Ecosystem, Government Effectiveness, and Economic Growth in GCC Countries: Evidence from Panel Cointegration and Panel ARDL Analysis

Understanding the determinants of sustainable economic growth is increasingly important for the Gulf Cooperation Council (GCC) countries as they pursue economic diversification beyond hydrocarbon dependence. This study examines the long-run effects of entrepreneurship ecosystems, government effectiveness, inflation, human capital, gross capital formation, trade openness, foreign direct investment (FDI), and information and communication technology (ICT) on economic growth in six GCC countries over 2006–2024. Using IPS panel unit root and Pedroni cointegration tests, the study establishes the existence of a stable long-run relationship among the variables. Long-run effects are estimated using FMOLS, DOLS, and CCR, with Panel ARDL-PMG employed as a robustness approach. The results consistently show that entrepreneurship ecosystems, government effectiveness, human capital, FDI, and ICT are positively associated with economic growth. Trade openness exhibits a negative long-run association, while the effects of inflation and gross capital formation vary across estimators. The significant negative error-correction term confirms convergence toward long-run equilibrium following short-run shocks. The findings highlight the importance of entrepreneurship, institutional quality, human capital, digital infrastructure, and productivity-enhancing FDI in supporting sustainable and diversified growth in the GCC economies.