Entrepreneurship in the EU: To Wish and not to be

Abstract

Abstract: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 selfemployment 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.

Institutions, Finance and the Level of Development: the Impact on Entrepreneurship in Transition

“…North has argued that insecure property rights result in using technologies that employ little fixed capital and that firms will typically be small (North 1990, p. 65). Grilo and Irigoyen (2006) report a negative effect of the perception of lack of finance on the probability of being self-employed using European data for 2000, though Grilo and Thurik (2005) are unable to identify an effect for 2004. Studies mentioned above indicate the protection of property rights and finance may present two crucial institutional characteristics affecting the entrepreneurship entry.…”

Determinants of entrepreneurial engagement levels in Europe and the US

“…Among the studies finding that education has a significant impact, the nature of the impact varies from study to study -some find a positive relation others a negative one and still others a negative up to some level of education and positive thereafter. 19 The results of Delmar and Davidsson (2000) and 13 Examples of empirical work following this approach can be found in Bates (1990), Blanchflower (2004), Blanchflower and Meyer (1994), Oswald (1998), Blau (1987), Douglas and Shepherd (2002), Leighton (1989, 1990), Grilo and Irigoyen (2006), Grilo and Thurik (2006), Lin, Picot and Compton (2000), Rees and Shah (1986), Reynolds (1997), Wagner (2003) and de Wit and van Winden (1989). 14 Other approaches can be found in the literature.…”

“…Much work has been done explaining the gender effect with respect to occupational choice. See Minniti, Arenius and Langowitz (2005), Grilo and Irigoyen (2006) and Minniti and Nardone, 2007). See also Verheul, Thurik and Grilo (2008) for some evidence showing that gender differentials in actual entrepreneurship are due to other factors than the preference for entrepreneurship.…”

“…First, to our knowledge it is the first to discriminate between more than two engagement levels of entrepreneurship. Standard binary choice models discriminate between nascent entrepreneurship and no engagement or entrepreneurship and no engagement (Blanchflower, Oswald and Stutzer, 2001;Blanchflower and Oswald, 1998;Grilo and Irigoyen, 2006;Thurik, 2005a and or success and failure (i.e. survival) in the nascent phase (Vivarelli, 2004;van Gelderen, Thurik and Bosma, 2005).…”

“…See http://europa.eu.int/comm/enterprise/enterprise_policy/survey/eurobarometer_intro.htm 3 The important role of perception variables is shown in Arenius and Minniti (2005), Koellinger and Minniti (2006) and Koellinger et al (2007). 4 The preference for entrepreneurship over paid employment is sometimes referred to as latent entrepreneurship (Blanchflower, Oswald and Stutzer, 2001;Grilo and Irigoyen, 2006). 5 See for a description of the COMPENDIA data set covering business ownership rates across 23 OECD countries in the 1972-2002 period.…”