Abstract
Abstract This paper examines the influencing factors of becoming informal investors in two groups of Central European countries: the innovation-driven (Estonia, Latvia, Slovenia and Slovakia) and efficiency-driven economies (Croatia, Hungary, Lithuania, Poland and Romania), based on the GEM (Global Entrepreneurship Monitor) database from 2014. According to the results, in the studied innovation-driven economies of Central Europe the probability of becoming an informal investor is higher for those, who know other entrepreneurs, who are confident in their own entrepreneurial skills, who are in the higher percentile of the household income, who are older and male. The results also suggest that in the studied efficiency-driven economies of Central Europe the probability of becoming an informal investor is higher for those who are confident in the own entrepreneurial skills, who know other entrepreneurs, who are in the higher percentile of the household income, who are older and male. The probability is decreased, if somebody is employed full-time. The study emphasises similarities instead of differences regarding the analysed aspect between the two groups of countries.
Highlights
The importance of informal investment in entrepreneurship is largely debated in literature (Wong and Ho, 2007), and it is a topic researched by the Global Entrepreneurship Monitor (GEM), which is the largest research initiative that analyses the propensity of a country’s adult population toward participation in entrepreneurial activities (Singer et al, 2014)
The results suggest that in the innovation-driven economies of Central Europe the probability of becoming an informal investor is higher for those who know other entrepreneurs, who are confident in their own entrepreneurial skills, who are in the higher percentile of the household income, who are older and male
The results suggest that in the efficiency-driven economies of Central Europe the probability of becoming an informal investor is higher for those who are confident in their own entrepreneurial skills, who know other entrepreneurs, who are in the higher percentile of the household income, who are older and male
Summary
The importance of informal investment in entrepreneurship is largely debated in literature (Wong and Ho, 2007), and it is a topic researched by the Global Entrepreneurship Monitor (GEM), which is the largest research initiative that analyses the propensity of a country’s adult population toward participation in entrepreneurial activities (Singer et al, 2014). The main aim of this paper is to emphasise the main influencing factors of becoming an informal investor in Central Europe. Since 2008, the GEM followed the World Economic Forum’s typology economies (Singer et al 2015), dividing the participating countries into three groups on the basis of their development level: factor-driven, efficiency-driven and innovation-driven economies.
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