High-Growth Aspiration Entrepreneurship: A Multi-Country Analysis Using GEM Data

Abstract

High-growth aspiration entrepreneurship has attracted much attention in the literature (Hermans et al., 2015; Lim et al., 2015). This paper examines simultaneously the impact of individual characteristics, institutional factors and country level control variables on high-growth aspiration entrepreneurship. The focus is on the employment growth aspirations, new products/market development of newly-established ventures in both developed and developing economies. The individual characteristics data is obtained from the Global Entrepreneurship Monitor (GEM) Adult Population Survey (APS), covering 62 countries (divided into innovation-driven and efficiency-driven) over a seven-year period (2005-2011). Multi-level estimation technique, which accounts for the hierarchical nature of the data, is used to examine employment growth aspirations. Dichotomous choice model (probit) is applied when testing the hypothesis for new products/market development. The results indicate that most of the individual characteristics have a positive and significant effect on employment growth aspiration in both innovation and efficiency-driven economies. Specifically, entrepreneur’s education, household income, social networks, skills and perceived opportunities are significant determinants of growth aspirations. We also find that employment growth aspirations and the product/market innovativeness are gender sensitive, with male entrepreneurs being more likely to have high growth aspiration. Small-size governments, and property rights protection are found to influence growth aspirations of young firms positively whereas higher levels of corruption have a negative impact on growth aspirations and on new products/market development. Entrepreneurial growth aspirations are also found to benefit from regulatory, normative and cognitive entrepreneurial environment. Finally, we find that the effect of both individual characteristics and the institutional settings varies according to the stage of a country’s economic development.