The social status of entrepreneurs: An analysis of informal and formal institutional determinants

Abstract

The social status of entrepreneurs, which measures the degree to which a country admires entrepreneurs and values their social contribution to society, varies significantly across countries. In some economies, such as the United States, entrepreneurs are seen as cultural heroes, whereas in others, particularly in many European countries, their status is less favorable. In this paper, we provide theoretical elaboration and empirical evidence to support the idea that informal institutions, such as uncertainty avoidance and collectivism, play a crucial role in determining social status. Additionally, formal institutions, like market freedom and government size, establish certain boundaries for these relationships. We analyze a sample of 105 countries that participated in the GEM project between 2003 and 2020. Our results indicate that entrepreneurs enjoy a higher social status in societies characterized by low uncertainty avoidance and a more collectivist orientation. Furthermore, these relationships are contingent upon the formal rules and regulations of the country.

An international study of early-stage entrepreneurship using global entrepreneurship monitor data

“…Parker and Van Praag (2010) discovered that the social status of the entrepreneurial occupation influences people's career preferences and choices to some extent. While some individuals may pursue entrepreneurship to make money and achieve financial independence, others value the social status and prestige that comes with success (Fuentelsaz et al, 2018;Huurinainen, 2015;Kalden et al, 2017). Thus, the respect and reputation of successful entrepreneurs may inspire non-entrepreneurs to start their businesses so that they too can enjoy a similar status.…”

“…SSE can also interact with EK&S and FoF to influence ESEA, as individuals with high EK&S may be more likely to pursue ESEA if they perceive a high SSE and a low FoF, or vice versa (Kollmann et al, 2017;Tsai et al, 2016;Van Trang et al, 2019). Due to the varying societal perceptions regarding the status of entrepreneurs, it is crucial to accumulate more evidence that clarifies the implications for the emergence of entrepreneurial activities in diverse contexts (Fuentelsaz et al, 2018). Understanding these implications is essential to gain insights into the factors that influence entrepreneurship within different societies.…”

“…, 2019). Due to the varying societal perceptions regarding the status of entrepreneurs, it is crucial to accumulate more evidence that clarifies the implications for the emergence of entrepreneurial activities in diverse contexts (Fuentelsaz et al. , 2018).…”