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

Abstract

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. Résumé : L'objectif de cet article est d'élaborer une typologie des activités entrepreneuriales des pays de l'OCDE durant la période 1999-2012. Notre intention est d'établir une distinction entre les économies managériales et entrepreneuriales, d'identifier des groupes de pays ayant des comportements économiques et entrepreneuriaux similaires et d'identifier les déterminants économiques et institutionnels des activités entrepreneuriales dans chaque groupe. Nous montrons que le niveau de développement, la spécialisation sectorielle ainsi que les variables institutionnelles liées à l'entrepreneuriat, au fonctionnement du marché du travail et à l'ouverture du pays sont déterminants pour appréhender les différences nationales en matière d'activité entrepreneuriale. Les résultats BLIND Manuscript-without author contact information Click here to view linked References

Cross-Country Differences in Entrepreneurial Internationalization Tendencies: Evidence from Germany and Pakistan

“…Covin and Miller (2014) argue that cross-national differences in EO can be best investigated by the use of institutional theory. It can be suggested that the extent to which institutions offer support to entrepreneurial firms is a major reason for differences in EO between developed and emerging markets (Abdesselam et al 2018;Tiwari and Korneliussen 2018). Entrepreneurial firms located in emerging or fragile markets often suffer from institutional burdens due to underdeveloped or non-existent external support (Clercq et al 2010).…”

Personal factors, entrepreneurial intention, and entrepreneurial status: A multinational study in three institutional environments

“…A potential reason for a variation in the importance of personal factors for either entrepreneurial intention or status can be found within the institutional environments themselves. As highlighted by previous researchers, variations in institutional environments that characterize countries may contribute to explaining inconsistencies in previous findings on entrepreneurial intention and/or entrepreneurial status (e.g., Dehghanpour Farashah 2015; Terjesen et al 2013;Carsrud and Brännback 2011;Shook et al 2003;Abdesselam et al 2018;Baughn and Neupert 2003). According to the institutional perspective on entrepreneurship (e.g., North 1991), the explanation of entrepreneurial activity (i.e., entrepreneurs versus non-entrepreneurs) requires the consideration of the situational context in the different nations, as in order for entrepreneurial intentions to translate into actual activity, they must be matched with the prevailing entrepreneurial opportunities (Shane and Venkataraman 2000), which are conditional on the quality of national institutions.…”

Linking firm characteristics to perceived important social factors for entrepreneurial activity

“…The business environment as perceived by enterprises varies across countries (Abdesselam et al, 2018;Ayyagari et al, 2007;Bartelsman et al, 2010;Dilli et al, 2018). Accordingly, the influence of social factors on entrepreneurship is perceived by firms differently across regions and countries (Pinho, 2017;Zygmunt, 2018;Androniceanu, 2019;Pinho, 2017).…”

“…Entrepreneurship is widely acknowledged as an engine of economy, as it contributes directly to employment rate and economic growth (Abdesselam et al, 2018;Acs et al, 2018;Bosma et al 2018). Indeed, small and medium-sized enterprises (SMEs) are vital for the European Union economies, as they generate 56.8% of the value added and employ 66.4% of the working force (European Commission, 2018).…”