Evangelos Siokas, Vasiliki Kremastioti
Circular economy, innovation, research and development expenditures (R&D) are critical drivers of economic growth. Entrepreneurship and innovative startup firms play a pivotal role in enhancing a country’s technological capabilities and supporting sustainable development. Economic policies are generally designed to promote opportunities that foster international entrepreneurial activity. This study primarily analyzes the relationship between gross domestic expenditure on R&D and economic growth in Greece, using econometric models such as the Granger causality test. This paper’s main goal is to analyze how R&D expenditure influences entrepreneurial activity which used circular economy to achieve high rates of sustainable economic growth. It also evaluates whether entrepreneurship effectively contributes to economic development. For this purpose, this paper presents the results of Vector Autoregression (VAR) and Granger causality models using data from Greece to determine the impact of R&D on startup formation and GDP. The findings suggest that fiscal policy should prioritize allocating R&D funding—especially from universities—to startups, in order to enhance high-value entrepreneurship and promote long-term sustainable economic growth.