Entrepreneurship,economic development,and institutional environment: evidence from OECD countries

The purpose of this article is to establish a typology of entrepreneurship for OECD countries over the 1999–2012 period. Our aim is to draw a distinction between managerial and entrepreneurial economies, to identify groups of countries with similar economic and entrepreneurial activity variables, and to determine the economic and institutional drivers of entrepreneurial activities in each group. We show that the level of development, sectoral specialization, and institutional variables related to entrepreneurship, functioning of the labor market, and openness of the country are decisive to understand differences in entrepreneurship activity across countries. Results show that the pre-crisis period, from 1999 to 2008, is a period of growth favorable to entrepreneurship. The financial crisis involved a break in entrepreneurial dynamism, with agricultural economies withstanding the financial crisis better. The 2010–2012 period of recovery is a period of a sharp slowdown in entrepreneurial activity, during which the countries that are less dependent on the financial sector proved to be the most resilient in terms of entrepreneurial activity. Nevertheless, it is the advanced knowledge economies with developed financial markets, fewer institutional regulatory constraints, and greater scope for qualitative entrepreneurship that show lower unemployment rates. These findings have important implications for the implementation of public policy in order to promote entrepreneurial activity and reduce unemployment.     

Comparing Academic Entrepreneurship in Europe – The Case of Sweden and Ireland

One of the greatest challenges facing European economies is the comparatively limited capacity to convert scientific breakthroughs and technological achievements into industrial and commercial successes. As a result, there is growing awareness of the proactive approach being undertaken by academic institutions, with many adopting a direct entrepreneurial role in collaborating with industry. This paper examines the activities of those academics involved with industry within two small European countries, namely Sweden and Ireland. In particular, it discusses and contrasts the extent to which academic entrepreneurship (i.e. all commercialisation activities outside of the normal university duties of basic research and teaching) has developed. It examines the influence of gender, age, previous entrepreneurial experience, work experience and university environment on the entrepreneurship activities of a sample of academics in both countries. The results demonstrate that there is considerable entrepreneurial experience among academics in both countries, and that this translates into a high degree of involvement in "soft" activities such as consultancy and contract research, but not into organizational creation via technology spin-offs.     

The interplay of entrepreneurship education and national cultures in entrepreneurial activity: a social cognitive perspective

Does entrepreneurship education result in entrepreneurial activities across national cultures? For the most part, prior research has examined the relationship between entrepreneurship education and entrepreneurial activity, using country-specific samples. However, many of these results are inconsistent. One reason for such inconsistent results may be a limitation of country-specific samples, given that they are valid in a domestic context but not generalizable. Our study addresses this limitation by using a cross-national sample of 24,457 respondents from 38 countries to examine the role of diverse national cultures. Building on the social cognitive theory, our results show that entrepreneurship education is more seminal for entrepreneurial activities that take place in countries with greater individualism, less uncertainty avoidance, and a high level of masculinity. This research presents a more complete picture of how entrepreneurship education may affect international entrepreneurship contingent upon national culture, and has implications for researchers, educators, and policy makers.     

Cross-Country Differences in Entrepreneurial Activity: The Role of Cultural Practice and National Wealth

In this paper, we argue that national culture is important in interpreting the differences of entrepreneurial activities between countries. Furthermore, national wealth plays a moderating role between national culture and entrepreneurial activities. Datasets from the Global Leadership and Organizational Behavior Effectiveness (GLOBE) project and Global Entrepreneurship Monitor (GEM) study were analyzed. We find that there are interaction effects between GDP, a proxy for national wealth, and several cultural dimensions on entrepreneurial activities. More traditional cultural variables (in-group collectivism, humane orientation, and power distance) enhance early-stage and established entrepreneurship in low- and medium-GDP countries, but hinder early-stage and established entrepreneurship in high-GDP countries. More modernistic cultural variables (performance orientation, future orientation, and uncertainty avoidance) promote high-growth and high-innovation entrepreneurship in some situations, especially in high-GDP countries. Implications and limitations are discussed.     

Socio-cognitive traits and entrepreneurship: The moderating role of economic institutions

We examine how country-level institutional context moderates the relationship between three socio-cognitive traits—entrepreneurial self-efficacy, alertness to new business opportunities, and fear of failure—and opportunity entrepreneurship. To do this, we blend social cognitive theory (SCT) with institutional theory to develop a multi-level model of entrepreneurial entry. We merge data from the Global Entrepreneurship Monitor (GEM) surveys and the Economic Freedom of the World (EFW) index for 45 countries from 2002 to 2012. Our results, which are based on a multi-level fixed-effects model, suggest that entrepreneurs' self-efficacy and alertness to new opportunities promote opportunity entrepreneurship while fear of failure discourages it. However, the strength of these relationships depends on the institutional context, with entrepreneurial self-efficacy and alertness substantially more likely to lead to new opportunity-driven ventures in countries with higher levels of economic freedom. These results provide suggestive evidence that economic freedom not only channels individual effort to productive entrepreneurial activities, but also affects the extent to which individuals' socio-cognitive resources are likely to mobilized and lead to high-growth entrepreneurship.     

International entrepreneurial culture—Toward a comprehensive opportunity-based operationalization of international entrepreneurship

Despite the abundance of international entrepreneurship studies, there is a need to develop valid measures of the international entrepreneurship construct. Based on prior conceptual studies, we contribute to the literature by advancing a scale of the international entrepreneurial culture (IEC) that considers opportunity-based behavior; and, aims to capture the overarching context of international entrepreneurship. We followed established scale development practices and conducted a research on UK and US medium-sized firms. Our proposed six-dimensional operationalization of IEC, which sufficiently matches the initial conceptualization, consists of international entrepreneurial orientation; international market orientation; international motivation; international learning orientation; international networking orientation with competitors; and, international networking orientation with non-competitors. The main implication from this study is that international entrepreneurship scholars can use in future research these six dimensions of the encompassing IEC context rather than a confined international entrepreneurship construct.     

Introduction to special issue of <Emphasis Type="Italic">Small Business Economics</Emphasis> on female entrepreneurship in developed and developing economies

Research into entrepreneurship has for many years been interested in the differences in rate of participation and performance by female entrepreneurs. The motivation for considering female entrepreneurship in both developing and developed countries arises from our increasing understanding of the significance of the role of women in creating, running and growing businesses as a fundamental driver for economic growth. This special issue examines the reasons for differences in gender participation across levels of development using empirical studies.     

Entrepreneurship,economic growth,and innovation: Are feedback effects at work?

This study aims to analyze the relationships between entrepreneurship, innovation and economic growth, and to show the feedback effects in these relationships. A Schumpeterian approach considering three equations linking GDP, innovation, and entrepreneurship facilitates this analysis. This paper presents empirical analysis of entrepreneurial activity in 13 developed countries. Panel data with fixed effects methodology, for the period 2002 to 2007, provides the means to estimate the equations. The analysis shows that several factors have positive impacts on innovation and entrepreneurship, including monetary policy and social climate. Additionally, a feedback effect is at work: economic activity promotes entrepreneurship and innovation activities, and the latter enhances economic activity. Therefore, policymakers must consider this effect when designing economic policies.     

Demographic diversity for building an effective entrepreneurial team: is it important?

Although traditional entrepreneurship literature often views entrepreneurship as an economic battle of a “lonely hero”, the prevalence of entrepreneurial teams is an emerging economic reality. This study examines the influences of demographic diversity variables in terms of age, gender, and functional background and team process variables in terms of team-level cognitive comprehensiveness and team commitment on entrepreneurial team effectiveness. With field interview data from 174 entrepreneurs representing 79 entrepreneurial teams, this study suggests that demographic diversity is not important for entrepreneurial team effectiveness, whereas the team process variables positively influence team effectiveness. The findings also suggest that the diversity in terms of gender, age and functional background does not contribute to the team-level cognitive comprehensiveness and team commitment. Finally, the study explores implications of the findings for practice and future research.     

Foreign direct investment and entrepreneurship: Does the role of institutions matter?

Development economics, international business, and entrepreneurship literature suggest that foreign direct investment (FDI) has significant positive spillover effects for entrepreneurial activities of host economies. However, the findings of past research are mixed, and they do not always confirm this suggestion. We argue that the reason for conflicting findings may be because of an incomplete understanding of the factors that influence the FDI-entrepreneurship nexus in different contexts. Previous studies have carried out only limited exploration of the contingencies in the FDI and domestic entrepreneurship relationship that may depend on the host country’s institutional capacity. We argue that not all countries can reap the rewards from FDI equally. Rather, we hypothesize that countries need to have a sufficient degree of institutional capacity relevant to specific conditions and appropriate threshold levels to successfully capture the positive spillover effects of FDI on domestic entrepreneurship. Utilizing panel data from 2006 to 2016 for 97 emerging markets, developing and developed countries (at different income levels), and a System Generalized Method of Moments (SGMM) estimator that controls for instrument proliferation in dealing with endogeneity problems, we test this hypothesis. We find that FDI has a negative (crowding-out) effect on domestic entrepreneurship at below-threshold levels of institutional capacity, and a positive (crowding-in) effect at above-threshold levels of institutional capacity. The crowding-out effect diminishes as the institutional capacity changes or improves to meet mutating economic environment conditions. Our findings are robust across a wide range of aggregate and disaggregate measures of different types of institutions and alternative empirical strategies.     

Stereotypical Notions of the Entrepreneur: An Analysis from a Perspective of Gender

The principal objective of this paper is an analysis of the stereotypical figure of the entrepreneur in the Spanish context, from a perspective of gender. We provide evidence that the characteristics largely associated with an entrepreneurial individual are stereotypically male or androgynous, with a notable absence of female typologies. Our findings suggest that this relationship has an influence on the continued predominance of male entrepreneurial activity. This study contributes to the growing empirical literature on female entrepreneurship from an understudied perspective; gender stereotyping, demonstrating that socially constructed gender stereotyping persists in contemporary Spanish culture.     

Entrepreneurship in the EU: To Wish and not to be

The entrepreneurial capacity in an economy is a key determinant of economic growth and productivity improvements. This paper uses survey data from the 15 EU Member States and the US to investigate two aspects of entrepreneurial capacity: latent and actual entrepreneurship. Latent entrepreneurship is measured by the probability of a declared preference for self-employment over employment. Other than demographic variables such as gender, age and education level, the set of explanatory variables used includes country specific effects, the perception by respondents of administrative complexities and of availability of financial support and a rough measure of risk tolerance. The most striking result is the lack of explanatory power of the perception of lack of available financial support in the latent entrepreneurship equation.     

Why is export-oriented entrepreneurship more prevalent in some countries than others? Contextual antecedents and economic consequences

Drawing on institutional economics, this article investigates how different contexts condition the prevalence of export-oriented entrepreneurship, which affects economic growth. We place emphasis on the differences between developed and developing countries through interaction effects that allow us to test for differential validity. Using simultaneous equation panel data models for a sample of 43 countries (2004–2012), we find that access to credit and access to communications are the most significant factors in explaining the export-oriented entrepreneurship required for economic growth. Policy implications for both developed and developing countries are suggested to enhance economic performance under specific context characteristics through export-oriented entrepreneurship.     

Environmental and psychological challenges facing entrepreneurial development in transitional economies

In the former planned economies, a major result of the economic reform programs has been the resurgence of private entrepreneurship. As these countries have struggled to make the transition to a market-based economy over the past decade, the environment has played an important structural role in entrepreneurial development. However, from a psychological perspective, the environmental structural context affects human action through cognitive processes such as self-regulation. Thus, we first identify and analyze the effect of the political, economic, legal, and cultural environment on the development of entrepreneurship in transitional economies, mainly using the former Soviet Union and particularly the Republic of Kazakhstan as an example. We then examine the role that social cognitive variables such as self-efficacy may play in the relationship between this external environment and entrepreneurial development.     

Identity,Enactment, and Entrepreneurship Engagement in a Declining Place

We examine entrepreneurship practice and identity work in a rural small town in New Zealand. Once prosperous, the town suffered economically and socially as old industries closed. Recently the town was rejuvenated, largely because of Linda's entrepreneurial activities. Our findings demonstrated conflict between her entrepreneurial identity and local sense of place. We theorize Linda's entrepreneurial identity in her business practice; where she experienced controversy, despite economic success. We argue that a complete understanding of identity and entrepreneurship practices requires attention to social and spatial processes, not just economic processes.     

Entrepreneurial orientation and international commitment

This paper contributes to the development of the field of international corporate entrepreneurship (ICE) by examining the influences that the time lapse between foundation and first international market entry may have on the development of an entrepreneurial orientation (EO). Moreover, the paper highlights the existence of a positive relationship between the development of an entrepreneurial orientation and both internationalization decision and dimensions (degree, scope) in established companies. Based on a sample of 155 Spanish firms, our findings suggest that an entrepreneurial orientation positively influences a firm’s propensity to internationalize activities. The results obtained confirm the idea that fast entry into foreign markets is positively related to the development of an entrepreneurial orientation in established firms, and that firms with a marked entrepreneurial orientation have higher relative international sales and operate in a greater number of foreign countries.     

Engaging diasporas as international entrepreneurs in developing countries: In search of determinants

Diaspora has been increasingly recognized by practitioners and scholars as an important factor of development in developing economies. Through their remittances and expertise, diaspora members have become an important source of foreign direct investment and managerial capabilities. Although the literature is glutted with examples of the impact of diaspora in fostering international entrepreneurship and reducing poverty, a theoretical foundation and framework is needed to explain this impact. This study explores a theoretical foundation of the diaspora entrepreneurship. A framework identifying the determinants of the diaspora’s international new venture creation in the country of origin is developed. The study suggests that diaspora international entrepreneurship depends on the level of altruistic motivation, need of social recognition, entrepreneurial opportunities, friendliness and receptivity of the home country, as well as integration of and support to immigrants in the host countries. Propositions for diaspora entrepreneurship are developed.     

From Rational to Wise Action: Recasting Our Theories of Entrepreneurship

In this article, I argue that if we challenge some tacit assumptions of narrow rationality that endure in much of entrepreneurial studies, we can elevate entrepreneurial ethics beyond mere external constraints on rational action, and move toward fuller integration of ethics as an intrinsic part of the process of value creation itself. To this end, I propose the concept of practical wisdom as a framework for exploring entrepreneurial decision making and action that can broaden the scope of our research to recognize entrepreneurship as an inherently normative enterprise. Specifically, I suggest that a framework built upon a concept of practical wisdom enables us to adopt a richer and more complex view of entrepreneurial decision making that is well suited to the dynamic and uncertain context of entrepreneurship. Further, this framework enriches our view of entrepreneurial ethics to include consideration of the personal character, values, and purpose of the entrepreneur. By examining entrepreneurship through a lens of practical wisdom, we can open up new avenues of fruitful inquiry for scholars of entrepreneurship.     

To formalize or not to formalize: Entrepreneurship and pro-market institutions

In this paper, we examine the effects of pro-market institutions on both formal and informal entrepreneurship. While formal entrepreneurship has long been studied in economic literature, informal entrepreneurship has been less frequently discussed. The purpose of this paper, therefore, is not only to examine the impact of pro-market institutions, but also to foster a better understanding of, and introduce a method to measure, informal entrepreneurship. For the purpose of this paper, pro-market institutions are broken into their two main components: economic liberalization and governance levels. The arguments posit that economic liberalization positively impacts both formal and informal entrepreneurship while governance levels have a positive impact on formal entrepreneurship but a negative effect on informal entrepreneurship. Furthermore, governance levels reduce informal entrepreneurship to a greater extent than they increase formal entrepreneurship, resulting in a net reduction in entrepreneurial activity. The analyses of a panel covering 51 countries from 2002–2009 provide robust support for these arguments.     

The Russian entrepreneur

Despite a significant interest in business and entrepreneurial activities in the former USSR, there continues to be a shortage of accurate information to dispel some of the myths and misinformation particularly about entrepreneurial activities occurring in the new Russia.Since the inner workings of the economic environment in the former USSR have rarely been described or understood, it is important to view present day entrepreneurs in the context of the country's historical perspective and entrepreneurial predecessors. While never in the forefront of the largely political stage of the country during the Tsarist and Soviet periods, entrepreneurs have nonetheless been consistently present throughout the country's history. Even though most everyone was engaged to some extent in some form of commercial activity, entrepreneurs from the 16th to the 19th century were thought to be inferior individuals. As a consequence, entrepreneurs were oppressed, heavily taxed, powerless individuals at the bottom level of society. But for a few notable exceptions, even Peter the Great's program to create a class of industrialists failed to develop entrepreneurs. In spite of this significant hindrance, entrepreneurship developed and flourished during the Tsarist period, mainly due to the geographical, economic and social, psychological, and political factors.Socialism, the State's domination of the economy, and the centrally planned economy impacted the type and extent of entrepreneurship during the Soviet period. Soviet entrepreneurs, though existing in the shadow economy, were hampered by several factors: only being exposed to mostly secondhand, printed information, not having a lawful mechanism to transfer the risk of entrepreneurship from the State to the individual, not being in sync with the ultimate purpose of the country's economic activity to further the interests of the State, and dealing with an economic situation where production units were separated from research and development units.Three entrepreneurial scenarios of a high-tech company, a Russian brokerage company, and an educational organization, are presented that exemplify the entrepreneurial talent and ability present in the country. To the extent that these scenarios are repeated in a variety of industries by many different entrepreneurs, the successful movement to a progressive market-oriented economy will be speeded.