Global Entrepreneurship Monitor Research Articles

A framework for investigating new firm entry: The (limited) overlap between informal-formal and necessity-opportunity entrepreneurship

We analyse entrepreneurial entry along the dimensions of informal-formal and necessity-opportunity entrepreneurship, distinguishing between them yet considering them jointly. While the dominant view in the literature conflates necessity with informal entry, and opportunity with formal entry, we hypothesise that informal entrepreneurship may be attractive to higher-income individuals as a testing ground for entrepreneurial ideas. We also explain why higher-income individuals may undertake necessity entrepreneurship. We utilise individual Global Entrepreneurship Monitor (GEM) data from Chile (2019–2021), which identifies informal-formal and necessity-opportunity entrepreneurial entry modes, to test hypotheses on the role of individuals´ income in the four types of entrepreneurial entry. We also consider changes in entrepreneurial entry during a crisis and a non-crisis periods. Our results confirm that the patterns in the data are consistent with hypotheses derived from our proposed theoretical framework. Executive summaryEmerging markets economies have very large informal sectors, and their entrepreneurial entry is often motivated by economic necessity rather than by business opportunity. But neither informal nor necessity entrepreneurship are usually expected to generate the positive benefits for growth and development predicted for formal and opportunity entrepreneurship. We argue that the dominant stream in the literature actually conflates informal and necessity entrepreneurship, both of which have been associated with low human and financial capital and productivity. We propose that the appropriate typology is more complex than this because there are examples of successful and dynamic informal firms. This leads us to identify four categories of entrepreneurial entry: informal-necessity (Type 1), formal-opportunity (Type 2), informal-opportunity (Type 3), and formal-necessity (Type 4). While necessity entrepreneurship has typically been associated with low-income individuals, we propose that formal-necessity entrepreneurship may be an entry path for both low- and high-income individuals, though for different reasons. Informal opportunity entry may likewise be an option for people with low-income as well as high-income.We therefore seek to disentangle the analysis of opportunity-necessity and of formal-informal entry and to demonstrate that the two less explored entry modes - informal-opportunity, and formal-necessity - are of considerable theoretical and practical significance in emerging economies. We test our framework in the emerging market economy setting of Chile, one of the more prosperous and open economies in Latin America. We use Global Entrepreneurship Monitor (GEM) data which uniquely for Chile allow us to distinguish between individuals along both the formal-informal and the necessity-opportunity dimensions. On this basis, we distinguish empirically between these four categories of entrepreneurial entry and explain how higher-income individuals may use informal-opportunity entrepreneurial entry as a “seed bed” to test their new business ideas. At the same time, we show that necessity entrepreneurship may be attractive to both lower- and higher-income individuals.We also show that the interplay between individuals´ income groups and four entrepreneurial entry modes is stable over “normal times” versus “crisis periods”. We observe that in response to a crisis, individuals with lower-incomes are likely to engage more in informal-necessity entrepreneurship while opportunity-informal entry by higher-income individuals will decline. These changes represent a more complex adjustment pattern than has been identified for developed economies, where entrepreneurial activity has been found to be countercyclical. Thus, in emerging markets, informal-necessity entrepreneurship plays a stabilizing role for those individuals with a more marginal position in the labor market during the crisis. In contrast, for those individuals who have access to higher household income, all forms of entrepreneurship become a less attractive option. We interpret this as indicating that these individuals have the option to wait for higher return opportunities to re-emerge. This is one of the first papers to explore the impact of the COVID-19 pandemic on entrepreneurship in an emerging market economy.

The implications of economic freedom and gender ideologies on women's opportunity-to-necessity entrepreneurship

PurposeThis study explores the relationship between economic freedom and gender ideologies on the allocation of women’s opportunity-to-necessity entrepreneurship across countries. Opportunity entrepreneurship is typically understood as one’s best option for work, whereas necessity entrepreneurship describes the choice as driven by no better option for work. Specifically, we examine how economic freedom (i.e. each country’s policies that facilitate voluntary exchange) and gender ideologies (i.e. each country’s propensity for gendered separate spheres) affect the distribution of women’s opportunity-to-necessity entrepreneurship across countries.Design/methodology/approachWe construct our sample by matching data from the following country-level sources: the Global Entrepreneurship Monitor’s Adult Population Survey (APS), the Fraser Institute’s Economic Freedom Index (EFI), the European/World Value Survey’s Integrated Values Survey (IVS) gender equality index, and other covariates from the IVS, Varieties of Democracy (V-dem) World Bank (WB) databases. Our final sample consists of 729 observations from 109 countries between 2006 and 2018. Entrepreneurial activity motivations are measured by the ratio of the percentage of women’s opportunity-driven total nascent and early-stage entrepreneurship to the percentage of female necessity-driven total nascent and early-stage entrepreneurship at the country level. Due to a first-order autoregressive process and heteroskedastic cross-sectional dependence in our panel, we estimate a fixed-effect regression with robust standard errors clustered by country.FindingsAfter controlling for multiple macro-level factors, we find two interesting findings. First, economic freedom positively affects the ratio of women’s opportunity-to-necessity entrepreneurship. We find that the size of government, sound money, and business and credit regulations play the most important role in shaping the distribution of contextual motivations over time and between countries. However, this effect appears to benefit efficiency and innovation economies more than factor economies in our sub-sample analysis. Second, gender ideologies of political equality positively affect the ratio of women’s opportunity-to-necessity entrepreneurship, and this effect is most pronounced for efficiency economies.Originality/valueThis study offers one critical contribution to the entrepreneurship literature by demonstrating how economic freedom and gender ideologies shape the distribution of contextual motivation for women’s entrepreneurship cross-culturally. We answer calls to better understand the variation within women’s entrepreneurship instead of comparing women’s and men’s entrepreneurial activity. As a result, our study sheds light on how structural aspects of societies shape the allocation of women’s entrepreneurial motivations through their institutional arrangements.

Gendered crisis approach: Exploring the gendered impact of Iranian sanctions on nascent entrepreneurship outcomes

Using a gendered crisis approach, this study investigates the impact of sanctions on Iranian women’s nascent entrepreneurial behaviours. Using data from the Global Entrepreneurship Monitor’s individual-level data and sanctions intensity data on 10,781 individuals, aged 18–65 from 2008 to 2018, the findings indicate that sanctions lower the perceived opportunities to start a business for women more so than for men. Although sanctions did not influence perceived start-up skills, suggesting resilience among women amid the challenges, sanctions did reduce the fear of failure for women more so than for men. Policymakers, both in the Collective West and in Iran, can use these insights to develop gender-inclusive measures and support women’s entrepreneurship in sanction-affected contexts.

An ADAM-based approach to unveiling entrepreneurial ecosystems in selected European countries

PurposeThis study aims to integrate the resource-based view (RBV) with other theories that consider external factors necessary to respond successfully to dynamic and uncertain entrepreneurial business conditions.Design/methodology/approachThe paper introduces an multi-criteria decision-making (MCDM) approach, utilizing the axial-distance-based aggregated measurement (ADAM) method with weights determined by the preference selection index (PSI) method, to rank eight European countries based on the Global Entrepreneurship Monitor (GEM) data. Additionally, the paper extends the existing entrepreneurial ecosystem taxonomy (EET), offering an additional classification.FindingsThe performed analysis emphasizes the importance and necessity of involving different dimensions of EE in assessing the countries' entrepreneurship performance, which facilitates creating adequate policy measures.Research limitations/implicationsThe crucial limitations are assessments based only on the GEM data from a particular period, possibly leading to a certain bias. Future research should involve data from various resources to increase the results' reliability.Originality/valueThe ranking results and country classification obtained using the ADAM-based approach and two distinct taxonomies served as the basis for formulating tailored policy recommendations, aiming to formulate tailored policy implications for increasing the number of new entrepreneurs and improving innovativeness, sustainability and internationalization of existing entrepreneurs for each group of countries.

Role of Cultural Factors on Entrepreneurship Across the Diverse Economic Stages: Insights from GEM and GLOBE Data

Abstract This article conducts an exploration of culture’s roles on entrepreneurial activities among countries at different economic stages. Culture factors from the GLOBE are converted into motivation culture and hygiene culture. The framework of this research is derived from Herzberg’s motivation hygiene theory. Total entrepreneurial activity (TEA) and the ratio of opportunity-driven to necessity-driven entrepreneurship (OPP/NEC) from global entrepreneurship monitor (GEM) are taken as measures for both the quantity and quality of entrepreneurial behavior. Panel regression with fixed effects is employed to test both direct and interaction effects. The direct relations show that the improvement of economic conditions discourages the TEA, while promotes the OPP/NEC; motivation culture significantly promotes OPP/NEC, while makes no difference in TEA; and hygiene culture significantly promotes TEA, while reduces OPP/NEC. In terms of interactive effects, motivation culture reduces the containment of economic development on TEA, yet hygiene culture hurts its promotion on OPP/NEC; motivation culture mitigates hygiene culture’s stimulation of TEA, while hygiene culture damages motivation culture’s fostering of OPP/NEC. Finally, a global culture map of quadrant distribution diagram is visually drawn with the corresponding culture scores. Notably, countries or regions in quadrant IV with high motivation culture and low hygiene culture demonstrate the most favorable entrepreneurial quality as well as high economic development.

Do institutional dimensions matter at different stages of the entrepreneurial process? A multi-country study

AbstractEntrepreneurs should navigate through different stages from the conception of an idea until the business is operational. According to these stages, we expected that the context has a different impact on an individual’s decisions. This paper analyses the role of institutional dimensions (regulative, normative, and cultural-cognitive) in the entrepreneurial process (potential, nascent, and new entrepreneurship), using data from the Global Entrepreneurship Monitor and Heritage Foundation, with a sample of 99 countries for the period 2001–2017. Through panel data, the main findings show that (a) regulations regarding new business creation have a stronger influence on new entrepreneurship, (b) social norms have more influence on potential entrepreneurs and individual perceptions regarding their self-capacity and experience to start a new business, and (c) the cultural-cognitive dimension has a stronger influence on nascent entrepreneurship. Policymakers could consider these results to promote and generate target group policies that effectively encourage entrepreneurial activity, which is also distinguished by the level of development among countries.

Comparative Analysis of the Determinants of Entrepreneurial Activities in the Middle East and Latin America

This study aims to contribute to advancing the understanding of entrepreneurial ecosystems, Latin American development, and the evolution and future perspectives of the Middle East. It used a cross-sectional research design and quantitative data with 750 observations from the Global Entrepreneurship Monitor, specifically the National Experts Survey and the Adult Population Survey. The results were analyzed by the Partial Least Squares Technique (PLS-SEM) by grouping countries into two balanced samples of underexplored regions: the Middle East and Latin America. The two regions, Latin America and the Middle East, have diverse entrepreneurial ecosystems; each condition impacts entrepreneurial activities in different ways. In Latin America, the most significant variable is “Physical Infrastructure”, while in the Middle East, the most significant determinants are “Commercial and Professional Infrastructure” and “Entrepreneurship Culture”. This study shows that to support entrepreneurial activities, each region requires different settings for their entrepreneurial ecosystems. It contributes to the literature on regional entrepreneurial ecosystems and to less explored regions to advance our understanding, which will drive better policies and actions.

The role of cognitive legitimacy in social entrepreneurship: a multilevel analysis

AbstractWhile the role of cognitive legitimacy in new organizational forms’ development has been extensively studied, the cognitive legitimacy of social entrepreneurship (SE) has so far received limited attention. Drawing from legitimacy theory and organizational ecology literature, we theorize and explore how SE obtains cognitive legitimacy via its prevalence and the legitimacy spillovers of the two categories it encapsulates: new business and nonprofit organizations. Using data from the Global Entrepreneurship Monitor, we find evidence for the existence of legitimacy spillovers from both new business and nonprofit organizations to SE activity. Second, the perceived density of social enterprises is significantly related to individuals’ engagement in SE. Third, we find the effect of legitimacy spillover effects is more significant when individuals perceive a lower density of social enterprises. Our study contributes to the research on SE, organizational ecology, and hybrid organizations by exploring the multiple sources for increasing SE’s legitimacy, particularly highlighting the existence of cross-categories legitimacy spillover effect within hybrid organizations.

Understanding the link: the competencies and motivations of nascent entrepreneurs to engage in sustainable entrepreneurship Comprender el vínculo: las competencias y motivaciones de los emprendedores nacientes para emprender un emprendimiento sostenible Entendendo o vínculo: as competências e as motivações dos empreendedores nascentes para se envolverem em empreendedorismo sustentável

Purpose This study aims to understand the relationship between entrepreneurial competencies (self-efficacy and social capital) and sustainable entrepreneurship and its incidence through entrepreneurial motivations (opportunity and necessity entrepreneurship). Design/methodology/approach The authors adopt a quantitative approach and use ordinary least squares regressions and bootstrapping analysis to test the hypotheses about the relationship between entrepreneurial competencies and sustainable entrepreneurship mediated by entrepreneurial motivations using a cross-sectional sample of 2,356 nascent entrepreneurs from the Global Entrepreneurship Monitor 2021–2022 report. Findings Evidence suggests that sustainable entrepreneurship is positively influenced by both opportunity- and necessity-driven entrepreneurship. Additionally, the results show that both entrepreneurial motivations positively mediate the relationship between self-efficacy and sustainable entrepreneurship. Originality/value The approach departs from the traditional unidimensional perspective on entrepreneurial motivations, recognizing that an entrepreneur can simultaneously embody varying degrees of both motivations. By integrating the study of entrepreneurial competencies and motivations into sustainable entrepreneurship, we can gain a holistic understanding of the dynamics at play.

Sustainable Business Practices and the Role of Digital Technologies: A Cross-Regional Analysis

This study examines the relationship between digital transformation and sustainable practices within enterprises against the backdrop of global transformative forces framed within the holistic paradigm of systems thinking. It examines the extent to which digital advances either facilitate or impede the sustainable development of companies, while also considering the systemic impact of demographic variables (such as gender, age, education), national income levels, and geographical regions on business sustainability. Using data from the Global Entrepreneurship Monitor (GEM), which encompasses 26,790 entrepreneurs in 47 countries, this research uses multinomial regression to assess how these factors influence companies’ commitment to social and environmental goals. A key finding is that the strategic use of digital technologies in sales processes significantly increases the likelihood that entrepreneurs will integrate social and environmental considerations into their decision-making. Notably, this conscientious approach to business is most prevalent among entrepreneurs in Latin America and the Caribbean. Our findings underscore the central role of digital technologies in driving sustainable business transformation while also highlighting the significant influence of regional socio-environmental contexts on business sustainability orientations.

Analysis of the Current Status on Entrepreneurial Intentions among CrowdWorks Freelancers in Japan

Entrepreneurship is vital for economic growth in Japan. However, the Global Entrepreneurship Monitor (GEM) report for 2022 reveals that Japan still lags behind in entrepreneurial intentions and attitudes. The purpose of this paper is to establish statistically the structural aspects of entrepreneurial intentions among Japanese social media freelancers by applying a social psychological approach, the Theory of Planned Behaviour. Furthermore, it aims to outline the framework and link it to future research activities. A total of 476 respondents were surveyed. While no significant differences in the variances of entrepreneurial intentions were found between platforms, three other factors showed significant distinctions when analysed for each variable. The mean score for perceived behavioural control stood at 2.213, aligning with the 2022 GEM report’s low rating. However, attitudes towards entrepreneurship (mean score 4.423) and entrepreneurial intentions (mean score 3.844) were moderate. Correlation analysis highlighted a strong positive and significant relationship between attitude and entrepreneurial intention, as well as positive and significant relationships between perceived behavioural control and entrepreneurial intention, and between subjective norm and entrepreneurial intention. Furthermore, path analysis using SPSS Amos indicated that perceived behavioural control may influence attitudes and subjective norms. Subsequent research should explore new variables in a broader sample, customised to participants’ cultural backgrounds.

FEMALE ENTREPRENEURSHIP: SKILLS FRAMEWORK FOR BRAZIL

Female entrepreneurship plays a central role in economic and social development; as a research topic, it has attracted attention from several areas. Work and research on female entrepreneurship are predominantly oriented from the perspective of the roles socially attributed to women. This research is based on Organizational Theory and aims to analyze entrepreneurship-related competencies, developing an integrative framework between macro-skills from scientific literature and the Global Entrepreneurship Monitor (GEM). Through a systematic review of the literature and applying a questionnaire, in which the data was subjected to cluster analysis using the agglomerative method, it was possible to develop a new proposal for grouping female entrepreneurial skills. The results contribute to the literature on female entrepreneurship and to discussions of gender and equality in organizations, stimulating new policies and strategies for the development of female entrepreneurship.

Opportunity entrepreneurship after 65: Relevant factors in OECD countries

AbstractThis research aims to analyze individual and national level factors that influence opportunity-driven senior entrepreneurship (people older than 65 years) in a group of 12 OECD countries. At this age most people in developed economies could choose between retiring, continuing working, or starting a new venture. It is important to understand the motivations behind their decision. We use data from the Global Entrepreneurship Monitor (GEM), to identify the effect of attitudes, perceptions, and aspirations as well as their sociodemographic characteristics. The sample consists of 24,139 observations from individuals older than 65 years. Additionally, we used the Human Development Index (HDI) – from the United Nations database–, to measure the country's level of development. Because of the nested nature of the data, we estimate our models using a multilevel logistic regression. Our results show that income, education, and occupation, in conjunction with the level of human development of a country have a significant influence on the probability of entrepreneurship by opportunity for senior individuals (+ 65). This research has policy and practical implications related to the decision of senior people to explore the creation of a new venture instead of opting for other alternatives such as retiring.

Cultural diversity and innovative entrepreneurship

AbstractA growing empirical literature has established a positive relationship between cultural diversity and entrepreneurship, often attributing this effect to innovation benefits of diversity. However, not all entrepreneurship is inherently innovative, raising the question of whether cultural diversity may increase the likelihood of an entrepreneur pursuing an innovative instead of a more replicative business strategy. This study investigates the relationship between regional cultural diversity and the innovation orientation of early-stage entrepreneurs and considers moderating factors by decomposing shares of foreign-born population by origin (within and outside of the EU) and by education level. Combining survey data from the Global Entrepreneurship Monitor with population-based indicators of cultural diversity, we carry out a multilevel analysis for 140 European regions. The results suggest that entrepreneurs in culturally more diverse regions are significantly more likely to exhibit innovation orientation.

Pro‐market Institutions and the Degree of Hybridity in Startup Social Ventures: The Moderating Effects of Organizational Activities

AbstractAs a departure from previous research that takes social ventures as a distinct organizational type, this study investigates the relationship between the pro‐market institutions in a country and the degree of hybridity in social ventures, focusing on the dimension of organizational goals. Additionally, it examines the contingent effects of organizational activities, such as the novelty of market offering and the implementation of social performance measurement. Combining Global Entrepreneurship Monitor data in 2009 and 2015 with other cross‐national databases, we test our theoretical predictions using 3648 startup social ventures across 42 countries. We find that pro‐market institutions have an inverted U‐shaped effect on the degree of hybridity in social ventures. Furthermore, the novelty of market offering and social performance measurement attenuate the impact of pro‐market institutions on organizational hybridity by shifting the inverted U‐shape to relatively negative and linear. Through this cross‐level empirical exploration, we develop a richer explanation of organizational hybridity and contribute to the growing literature on social ventures and hybrid organizations.

Effects of gender equality and social costs of failure on early-stage entrepreneurship activity

PurposeIn this study, we question: how do the social costs of failure interact with gendered institutions to affect the early stage entrepreneurship activity? We address this question by employing the institutional theory and a unique dataset of 286,989 entrepreneurs across 35 countries.Design/methodology/approachTo test our hypotheses, we use a multilevel modeling analysis that nests individual entrepreneurs within the countries. To capture individual and country-level variables, we constructed a unique dataset that combines data from the Global Entrepreneurship Monitor (GEM), European Flash Barometer (EUFB), World Bank Development Indicator (WDI), World Bank Doing Business Report (WBDB) and World Economic Forum (WEF).FindingsOur analysis confirms that higher levels of the country-level gender equality positively correlate with the early-stage entrepreneurship activity of women. Moreover, we find that this positive relationship is amplified in institutional environments with high social costs of failure, suggesting that societal intolerance for failure can exacerbate the negative effect of gender inequality on the participation of women in entrepreneurship.Research limitations/implicationsOur research contributes to academic interest on the role of legitimacy in women entrepreneurship and is of particular interest to international business scholars, seeking a better understanding of multidimensional construction of institutional frameworks across countries. In this study, we set out to address an important research question: how do the social costs of failure interact with gendered institutions to affect entrepreneurship activity? Our study provides a comprehensive portrait of gendered institutions by including the framework conditions of education, healthcare and political power. We found that in societies with gender equality, the likelihood of individuals engaging in the early-stage entrepreneurship activity is higher and that the positive relationship is strengthened in national environments with high social costs of failure.Practical implicationsOur study findings underscore the need for government policies addressing global gender gaps in economic empowerment. In particular, policies assisting women in obtaining education in high-growth industries like information technology or providing funding to women-dominated industries may foster activity for women seeking to do business in such industries. Such policies connect the early-stage entrepreneurship activities with gender equality concerns and initiatives.Social implicationsRegarding the social costs of failure construct, specifically, prior studies generally focus narrowly on the context of failed entrepreneurs. We cast a wider net on men and women entrepreneurs’ entry decisions (irrespective of prior experience with business failure) and provide new views on the effects of social costs of failure on entrepreneurial ecosystems. We also extend the research on the legitimacy of women as entrepreneurs with the gender equality construct.Originality/valueUnlike previous studies, which often focus on the “3Ms” of market, money and management, our research adopts a more holistic perspective. We recognize that the opportunities and challenges faced by entrepreneurs are shaped not only by individual skills and resources but also by the broader macroenvironment. By incorporating the framework conditions of education, healthcare and political power, alongside the intricate interplay of social costs and norms, our study paints a comprehensive picture of the landscape of female entrepreneurship.

Social Network of the Executive Managers and the Performance of Iranian Start-Up Businesses; Evidence based on the Findings of the Global Entrepreneurship Monitor (GEM)

Social Network of the Executive Managers and the Performance of Iranian Start-Up Businesses; Evidence based on the Findings of the Global Entrepreneurship Monitor (GEM)

E-Government and Entrepreneurship: The Perspective of Risk

ABSTRACT Risk is an important factor that hinders entrepreneurial activities, especially for entrepreneurs with high aspirations. This study examines e-government’s impact on entrepreneurship from a risk perspective. Based on individual data from the Global Entrepreneurship Monitor, results show that e-government promotes new ventures, especially those with aspirations to grow and innovate, thus enhancing the quantity and quality of entrepreneurship. Furthermore, mechanism analysis reveals that e-government significantly reduces actual risk and fear of failure, suggesting that it creates a stable environment and decreases risk aversion, which encourages starting new ventures and high-quality entrepreneurial activities. E-government reduces entrepreneurial risk by improving country governance in three dimensions: efficiency of public services, regulatory quality, and control of corruption. Besides, e-government has larger effects on enhancing the quality of entrepreneurship in developing economies. This study provides new insight into e-government’s effects on entrepreneurship and the mechanism.

Household and entrepreneurial entry: an individual entrepreneurial capital perspective

PurposeHow does the family influence individual entrepreneurial entry? The literature does not provide a satisfactory answer. In this paper, we develop an individual entrepreneurial capital perspective to systematically evaluate the impact of current households on entrepreneurship at both theoretical and empirical levels.Design/methodology/approachBased on the Global Entrepreneurship Monitor (GEM) database from 2010 to 2018, we used logit regression models to examine the relationship between household size and opportunity- and necessity-motivated entrepreneurship.FindingsThe empirical results show that with the expansion of household size, the possibility of opportunity-motivated entrepreneurship shows a trend that first declines and then rises, and the possibility of necessity-motivated entrepreneurship shows an upward trend, suggesting that there are two types of opposing mechanisms that affect the relationship between household and entrepreneurial entry.Practical implicationsFamily households are the starting point of individual growth and provide initial cognitive and social resources for decision-making. For entrepreneurs, it is necessary to make full use of household-based capital and networks to promote entrepreneurial activities. For the government, it is necessary to explore the development and implementation of household-based entrepreneurial policies.Originality/valueThrough analyses of the U-shaped relationship between household size and opportunity-motivated entrepreneurship and the positive relationship with necessity-motivated entrepreneurship, we reveal the relationship between household and entrepreneurship, reconcile the contradictions in the literature and contribute to the two fields of family studies and entrepreneurship.

Determination and classification of entrepreneurial efficiency of countries: Data envelopment analysis and hierarchical clustering analysis

Entrepreneurship initiatives have undeniable effects on national economies. States and governments produce various strategies and policies to increase the contribution of entrepreneurship to the country's economy. Entrepreneurship levels of countries are determined by various organizations. Country entrepreneurship scores and rankings are regularly published by the “Global entrepreneurship monitor (GEM)”. Countries, on the other hand, understand their current level of entrepreneurship according to these reports. In this research, it is aimed to determine the entrepreneurial activity efficiency levels (EAE) of the countries with the data obtained from the GEM 2021 reports and to cluster them according to their activity levels. In this context, forty-two country data of five indicators presented in the 2021 GEM report were used. The research was carried out in two stages. In the first stage, four output-oriented data envelopment (DEA) models were created and the EAE were determined. In the second stage, the clustering of countries according to their EAEs was carried out by hierarchical clustering analysis. According to the research findings, 21 countries were at full efficiency in the DEA-1 model, 22 countries were at full efficiency in the DEA-2 model, and 18 countries were at full efficiency in the DEA-3 and DEA-4 models. In the hierarchical clustering analysis, the countries are clustered in three groups. Twenty-two countries were included in Cluster-1, seven countries in Cluster-2, and thirteen countries in Cluster-3. Cluster-1, Cluster-2 and Cluster-3 were characterized as high, middle, and low efficiency levels, respectively. As a result of the research, suggestions were made to countries to improve their entrepreneurial activities.