Size matters: entrepreneurial entry and government

Abstract

We explore the country-specific institutional characteristics likely to influence an individual's decision to become an entrepreneur. We focus on the size of the government, on freedom from corruption, and on 'market freedom' defined as a cluster of variables related to protection of property rights and regulation. We test these relationships by combining country-level institutional indicators for 47 countries with working age population survey data taken from the Global Entrepreneurship Monitor. Our results indicate that entrepreneurial entry is inversely related to the size of the government, and more weakly to the extent of corruption. A cluster of institutional indicators representing 'market freedom' is only significant in some specifications. Freedom from corruption is significantly related to entrepreneurial entry, especially when the richest countries are removed from the sample but unlike the size of government, the results on corruption are not confirmed by country-level fixed effects models.

The influence of socio-cultural environments on the performance of nascent entrepreneurs: Community culture, motivation, self-efficacy and start-up success

“…Our understanding of individual factors enabling and hindering entrepreneurship has significantly increased, however, it is only relatively recently that researchers have addressed the question of how embedded entrepreneurial behavior is in national institutions. In particular, crossnational research has yielded valuable insights into formal institutions influencing entrepreneurial behavior (e.g., Aidis, Estrin and Mickiewicz 2010;Bowen and DeClercq, 2008;Djankov, La Porta, Lopez-de-Silanes and Shleifer 2002;Levie and Autio, 2008;Van Stel, Storey and Thurik, 2007). By contrast, little research has addressed the role of informal institutions, including culture.…”

Moving on from nascent entrepreneurship: measuring cross-national differences in the transition to new business ownership

“…This research typically regards this occupational choice to be akin to discovering entrepreneurial opportunities deemed worth exploiting through the creation of a venture (e.g., Aidis, Estrin, and Mickiewicz, 2012;Brixy, Sternberg, and Stüber, 2012). However, we know from longitudinal studies that follow nascent entrepreneurs -i.e.…”

“…Aidis, Estrin, and Mickiewicz, 2012;Wennekers, van Stel, Thurik, and Reynolds, 2005). Studies contrasting influences on nascent and new business ownership using the same sample of countries are relatively scarce, but point to different determinants of nascent vs. new business ownership.…”

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“…The situation of CEE and CIS countries with regard to business start-ups and especially NTBFs is somewhat special. Aidis, Estrin and Mickiewicz [Aidis et al, , 2012 point out the weak institutions in those countries and argue that the institutional environment is important in explaining the levels of entrepreneurship development. Moreover, they make an observation that freedom from corruption is significantly related to entrepreneurial entry.…”