How Does National Culture Influence Entrepreneurship?

Abstract

How does national culture influence entrepreneurship? There are three dominant perspectives –internalized cultural dispositions view, legitimacy view, and social support view– which propose distinct theoretical channels and yield partially conflicting propositions regarding the role of culture in entrepreneurship. I offer a fresh approach to culture-entrepreneurship research by decoupling the theoretical mechanisms proposed by the internalized cultural dispositions view from other cultural perspectives. The empirical context of this study are second-generation immigrants of different ancestries in the U.S. Second-generation immigrants have been born, educated, and currently live within the shared cultural, institutional, and economic environment of the U.S. but potentially differ in cultural dispositions as influenced by the culture of their country of ancestry. Specifically, I argue that second-generation immigrants are more likely to be entrepreneurs if their parents’ country-of-origin culture is characterized by high levels of risk-taking propensity, need for achievement, and need for autonomy. Using data on more than 50,000 second-generation immigrants and multilevel modelling, I find support for these propositions. The results are robust to the incorporation of the legitimacy and social support view and non-cultural explanations proposed by immigrant entrepreneurship research. This paper, by providing evidence from the internalized cultural dispositions perspective, sheds light on the mechanisms through which culture matters.