Abstract. The purpose of this study is to explore the mediating role of entrepreneurship between financial development and economic growth. Using data from 29 emerging economies (2006–2022) and Structural Equation Modelling (SEM) to assess both the direct and indirect influence of the financial sector on growth through entrepreneurial activity. The findings indicate that financial development enhances growth when channelled through entrepreneurship, while its direct effect turns negative without this mediation. Entrepreneurship also has a direct positive impact on growth. These findings reveal the importance of promoting entrepreneurial activity to strengthen financial systems, human capital, institutional quality, and inclusive growth.

Keywords: financial development, economic growth, entrepreneurship, emerging economies, Structural Equation Modelling (SEM).