Rate Of Entrepreneurial Activity Research Articles

Beyond the Convention: A Novel Incremental Predictor of Entrepreneurial Psychology and Activity

We add insight into explanatory factors of national differences in entrepreneurial activity by introducing a unique new variable, a pathogen, known to affect individual behavior and culture. Theoretical and empirical research linking pathogen prevalence to individual personality and culture is on the rise in various literatures including sociology and economics; we apply this knowledge to the field of entrepreneurship. Our paper demonstrates that something known to biology, medicine, and psychology to affect behavior, shows a significant influence on entrepreneurial intent and entrepreneurial activity at the national level. Overall, the work offers a multi-level bridge, connecting psychology, culture, and entrepreneurial activity rates - providing insight for theory building and refinement.

A novel application of fuzzy-set qualitative comparative analysis to GEM data

This study constitutes a novel application of fuzzy-set qualitative comparative analysis to Global Entrepreneurship Monitor (GEM) data. This study seeks to demonstrate that fsQCA enriches previous conclusions from linear regression analyses that state that a relationship exists between the GEM's Total Entrepreneurial Activity rate (TEA) and variables representing entrepreneurial attitudes and social values of adult populations toward entrepreneurship. FsQCA allows researchers to estimate which of these attitudes and social values are necessary, sufficient, or both for full membership in the set of most entrepreneurial active countries within the set of GEM innovation-driven countries. FsQCA provides also valuable details that contribute to explain why, although significant, some GEM regression analyses do not usually show a high explanatory capacity. The findings of this study demonstrate that fsQCA widely extends the possibilities of analysis and understanding of the role of GEM indicators. FsQCA allows further research involving other groups of countries, different sets of GEM indicators, and geographical configurations.

Institutional outlook of the entrepreneurial climate in Ghana

Purpose– Previous scholarly studies on institutions tend to create a sombre picture of institutions by ignoring to examine the antecedents of formal and informal institutions. The purpose of this paper is to overcome this limitation by proposing a conceptual framework of the antecedents of formal and informal institutions of entrepreneurial climate in a less developed market setting.Design/methodology/approach– This study builds on a comprehensive survey of the literature on institutions by using a synthesis thematic methodology to identified key scholarly studies which have been published in previous theoretical and empirical studies and proposes a conceptual framework of the role of formal and informal institutions in defining entrepreneurial climate in a developing economy’s context.Findings– The findings of the paper suggest that political factors and economic factors define formal institutions whilst socio-cultural factors define informal institutions. These factors rooted in political, economic and socio-cultural factors have a major influence on the rate and nature of entrepreneurial activity in a developing country setting.Practical implications– This paper contributes to the literature on entrepreneurship and intuitional theory by focusing on the antecedents of formal and informal institutional factors that shape entrepreneurial climate in Ghana.Originality/value– To the authors’ knowledge, this is the first review that explores the nature of entrepreneurial climate and proposes a conceptual framework of the role of formal and informal institutions in defining entrepreneurial climate in Ghana.

The Characteristics and Determinants of Entrepreneurship in Ethiopia

Using Global Entrepreneurship Monitor (GEM) approach, the study analyzes the characteristics and determinants of entrepreneurship in Ethiopia. Primary data are collected through the Adult Population Survey (APS) and analyzed using Probit model. To overcome the hetroscedasticity problem, which is prevalent in cross section studies, robust standard errors were employed. The findings of the study reveal that about 53% of the adults in Ethiopia are potential entrepreneurs. The perceived opportunity rate in Ethiopia (65%) is above the average for factor-driven economies (63%); while the perceived capabilities rate (69%) is below the average for factor-driven economies (71%). Ethiopia’s rate of entrepreneurial intention (22%), early-stage entrepreneurial activity rate (12.2%), and established business activity rate (8.3%) are below the average for both factor-driven economies and Sub-Saharan African countries. The econometric analysis indicates that demographic variables such as age, level of education, societal attitude towards entrepreneurship, and social networks (knowing someone in business) are significant in influencing potential entrepreneurship and entrepreneurial intensions in Ethiopia. In early-stage entrepreneurial activity (TEA),"Fear of failure" is found to have a negative and statistically significant effect. On the other hand, the probability of engaging in TEA significantly differs between those living in urban and rural areas. Furthermore, the results provide basic data to develop national entrepreneurship strategy, consistent with the MSE development strategy and other macro and sectoral level strategies. Thus, the low rate of TEA and established business in Ethiopia can be improved by expanding the quantity and quality of support services. Moreover, there is also a need to develop region-specific entrepreneurial development plan to reduce region to region or urban-rural differences. Keywords: Global Entrepreneurship Monitor (GEM), Perceived Opportunities and Capabilities, Total Early-Stage Entrepreneurial Activity (TEA)

The Characteristics and Determinants of Entrepreneurship in Ethiopia

Using Global Entrepreneurship Monitor (GEM) approach, the study analyzes the characteristics and determinants of entrepreneurship in Ethiopia. Primary data are collected through the Adult Population Survey (APS) and analyzed using Probit model. To overcome the hetroscedasticity problem, which is prevalent in cross section studies, robust standard errors were employed. The findings of the study reveal that about 53% of the adults in Ethiopia are potential entrepreneurs. The perceived opportunity rate in Ethiopia (65%) is above the average for factor-driven economies (63%); while the perceived capabilities rate (69%) is below the average for factor-driven economies (71%). Ethiopia’s rate of entrepreneurial intention (22%), early-stage entrepreneurial activity rate (12.2%), and established business activity rate (8.3%) are below the average for both factor-driven economies and Sub-Saharan African countries. The econometric analysis indicates that demographic variables such as age, level of education, societal attitude towards entrepreneurship, and social networks (knowing someone in business) are significant in influencing potential entrepreneurship and entrepreneurial intensions in Ethiopia. In early-stage entrepreneurial activity (TEA),Fear of failure is found to have a negative and statistically significant effect. On the other hand, the probability of engaging in TEA significantly differs between those living in urban and rural areas. Furthermore, the results provide basic data to develop national entrepreneurship strategy, consistent with the MSE development strategy and other macro and sectoral level strategies. Thus, the low rate of TEA and established business in Ethiopia can be improved by expanding the quantity and quality of support services. Moreover, there is also a need to develop region-specific entrepreneurial development plan to reduce region to region or urban-rural differences. Keywords: Global Entrepreneurship Monitor (GEM), Perceived Opportunities and Capabilities, Total Early-Stage Entrepreneurial Activity (TEA)

The Influence of the Quality of Government Institutions on Entrepreneurial Motivation: Exploring the Variance Across Countries.

Despite the increasing understanding of the relationships between institutions and entrepreneurship, the influence of the quality of government institutions on entrepreneurship is less addressed. This paper focuses on this critical determinant of entrepreneurship in developing and developed countries. Drawing from institutional theory we hypothesize and empirically assess the role of the quality of institutions in entrepreneurial activity. We examine how the quality of government institutions influences the rate of necessity-based entrepreneurial activity across countries and over time by using a cross-sectional time-series approach on data from the Global Entrepreneurship Monitor (GEM) database covering the years 2001-2011. Our results suggest that higher economic development associated with better quality of institutions reduces the prevalence of necessity-based entrepreneurship. Our findings imply that developing countries must rationally organize their functions, and seek to remove unnecessary barriers, decrease political instability, and controls that hamper entrepreneurial activity.

Micro Enterprises’ Start-Up Constraints in South Africa

The creation of micro enterprises is important to the reduction of high levels of poverty, income inequality and unemployment in South Africa. The objective of the study is to investigate the constraints faced by the owners of micro enterprises during the start-up stage. Understanding these factors can help to improve the low total early stage entrepreneurial activity rate of South Africa. The study used the qualitative research technique. In-depth interview method was used for primary data collection from twenty two owners of micro enterprises. The results indicate that inadequate owners’ capital, difficulty in raising external finance and lack of physical resources such as equipment are some of the major constraints to new business creation. Other important barriers are lack of experience and start-up skills, high level of competition and difficulty in getting a proper location. Recommendations to reduce the constraints faced by the owners of new micro enterprises during the start-up phase are suggested. DOI: 10.5901/mjss.2014.v5n23p30

Relationship between Uncertainty Avoidance Culture, Entrepreneurial Activity and Economic Development

The aim of this study is to observe uncertainty avoidance as an important national cultural dimension and to analyze uncertainty avoidance effect on “Total Entrepreneurial Activity”. Total entrepreneurial activity measures the level of the economic development and entrepreneurship. The relationship between uncertainty avoidance, entrepreneurship and economic development was analyzed by three hypothesises. Correlational regression analysis in SPSS was used, and as a result of analysis, it has been found that a country’ economic development level (GDPPC) influence its uncertainty avoidance level and the total entrepreneurial activity (TEA)rate.

About the interactive influence of culture and regulatory barriers on entrepreneurial activity

In this paper cultural values and regulatory barriers to start-up are presented as characteristics of the business environment which influence the international differences in the level of entrepreneurial activity. A first objective of this paper is to measure the importance of a country’s cultural values in determining the national level of entrepreneurial activity, calculated by the Total Entrepreneurial Activity rate from the Global Entrepreneurship Monitor. Culture is studied using Schwartz’s value structure (Schwartz 1994). This allows for the differentiating of seven cultural orientations that are then arranged around three bipolar dimensions: Autonomy- Embeddedness, Egalitarianism-Hierarchy and Harmony-Mastery. The paper also studies the effect of regulatory barriers for business start-ups on the Total Entrepreneurial Activity in different countries. Regulatory barriers are determined using data from the “Doing Business” project of the World Bank. The role of cultural values and regulatory barriers in entrepreneurial activity is tested using data from 56 countries and Structural Equation Modeling. The paper shows that cultural values and regulatory barriers are not related to entrepreneurship in the same way in countries with differing levels of development. On the contrary, the strength and nature of the influence of both factors on entrepreneurial activity depends on a country’s per capita GDP. Furthermore, the impact of regulatory barriers on entrepreneurship is moderated by cultural values. Thus, the discouraging effect of the regulatory barriers on entrepreneurial activity is more important in those countries with a societal culture characterized by autonomy, egalitarianism and harmony values.

Culture and Entrepreneurship: The Case of Latin America

The aim of this paper is to contribute to an increased knowledge of the cultural values and the entrepreneurial activity that are present in countries with different levels of development. Within the group of developing countries, we focus our analysis on the case of Latin America.The study uses data from the Schwartz value survey (svs) to measure cultural values, and Global entrepreneurship monitor (Gem) for information regarding entrepreneurship. The results show that cultural variables, together with the rate of entrepreneurial activity, clearly distinguish developing countries from developed ones. Higher entrepreneurial activity is found in countries with lower levels of development; however, the cultural value dimensions of autonomy and egalitarianism are associated with higher development levels. In the specific case of Latin America, the results reveal the existence of two groups of countries. Firstly, Bolivia, Peru and Venezuela have higher rates of entrepreneurship and, at the same time, a greater prevalence of some cultural values (notably embeddedness, but also Hierarchy). In contrast, another group of countries in the region—Argentina, Brazil, Chile, Costa Rica and Mexico—is characterized by the presence of opposing cultural values (autonomy and egalitarianism), more in line with those corresponding to developed countries.The paper concludes with a discussion of the results, including some interesting implications, from both academic and policy perspectives. In the case of Latin America, a certain combination of cultural values (embeddedness and egalitarianism) may be leading to higher start-up rates. Thus, promoting these values could contribute to entrepreneurship and economic development.

Quality of Government Institutions and Entrepreneurial Motivation: A Multi-country Approach

Despite the increasing understanding of the relationships between institutions and entrepreneurship, the influence of the quality of government institutions on entrepreneurship is less addressed. This paper focuses on this critical determinant of entrepreneurship in developing and developed countries. Drawing from institutional theory we hypothesize and empirically assess the role of the quality of institutions in entrepreneurial activity. We examine how the quality of government institutions influences the rate of necessity-based entrepreneurial activity across countries and over time by using a cross-sectional time-series approach on data from the Global Entrepreneurship Monitor (GEM) database covering the years 2001– 2012. Our results suggest that higher economic development associated with better quality of institutions reduces the prevalence of necessity-based entrepreneurship. Our findings imply that developing countries must rationally organize their functions, and seek to remove unnecessary barriers, decrease political instability, and controls that hamper entrepreneurial activity.

The Role of Formal and Informal Gendered Institutions in Rate and Type of Female Entrepreneurship

Drawing on institutional theory, this research analyses the role of formal and informal gendered institutions on female entrepreneurial activity across countries. Given the call for advancing in the explanation of the female entrepreneurship phenomenon and specifically with an international scope, we adopt a macro-level perspective in order to gain insights about the factors affecting the supply of women entrepreneurs across countries. Besides the overall rate of female entrepreneurial activity, we consider also two forms of women’s entrepreneurship, depending on the motivation originating the business (opportunity vs. necessity). The empirical analysis draws on a merged sample made up of 97 observations at a national level, with data compiled from several sources (GEM, WEF and WB) and corresponding to 2008 and 2009. Our results suggest that gendered institutions are relevant for explaining the level of female entrepreneurial activity in a country, but particularly for opportunity-driven entrepreneurship, as for necessity-driven activity we do not find any significant effect. These findings confirm the importance of considering gendered institutions in the study of women’s entrepreneurship, and open lines for future research in the promising intersection between institutional theory and women’s entrepreneurship. Our research has also important implications for policies addressed to foster female entrepreneurship.

Kauffman Index of Entrepreneurial Activity, National Report 1996-2005

The Kauffman Index of Entrepreneurial Activity, introduced in 2005, captures the dynamic nature of business creation in the United States. Presenting the percent of the population of adult non-business owners who start a business each month, the Kauffman Index confirms the relative steadiness of the national interest in business creation and suggests that American optimism continually fuels new start-ups. This measure of the rate of business creation at the individual owner level captures all new businesses – even those that fail after the first month. It includes both businesses with employees and those without, businesses that are incorporated and those that are not, and all industries, from construction to high-tech.While estimates from the Bureau of Labor Statistics indicate that more than ten percent of the U.S. workforce is self-employed business owners, government sources do not report the rate of business creation or entrepreneurial activity on a regular basis. The Kauffman Index uses matched data from the 1996-2005 Current Population Survey (CPS) to examine changes in the rate of entrepreneurial activity in the United States over the last decade. New CPS data available for 2005 and a refined definition of the Kauffman Index allow for an updated report this year, with consideration of trends over the 1996-2005 period and separate estimates for specific demographic groups.

The Relationship between Planning Strategies and Entrepreneurial Success for Start-Up Entrepreneurs in the Western Cape

The total entrepreneurial activity rate in South Africa was 9.1% in 2011, compared with 8.9% in 2010, which is below the average for similar economies. This study examines the moderating impact of environmental difficulty on the relationship between planning strategies and entrepreneurial success. The authors carried out a cross-sectional interview-based study of 60 start-up entrepreneurs in the Western Cape in South Africa. The results show that environmental difficulty moderated the relationship of ‘opportunistic’ and ‘reactive’ strategies to entrepreneurial success. No moderation effects were found for environmental difficulty on the relationship between success and ‘complete planning’ and ‘critical point planning’ strategies.

Influences of gendered institutions on women ' s entry into entrepreneurship

Purpose – Research and theory indicate that macro-level variables can influence the effects of individual-level factors on the economic behavior of women; however, this has rarely been examined with regard to women ' s entrepreneurship. Entrepreneurship has thus far been examined from a gender-neutral perspective. The purpose of this paper is to address this gap by deriving predictions using a sociological model of gender stratification and examining the effects of gendered institutions on women ' s entrepreneurship. Design/methodology/approach – Using the Global Entrepreneurship Monitor (GEM) dataset comprising over 40,000 individuals across 30 countries combined with data from the Global Gender Gap Index (GGGI), the authors examined the direct as well as cross-level moderation effects of gendered institutions on the probability of women entering into entrepreneurship. Findings – Results indicated that gendered institutions moderate effects of individual variables on the entrepreneurship of women, suggesting that in theory and research, individual factors affecting women ' s entrepreneurship should be considered within the larger cultural context. Research limitations/implications – The findings provide additional evidence for the gender stratification theory of women ' s economic activity. Future research should examine alternative operationalizations of the variables, as well as effects of additional gendered institutions. Practical implications – Results suggest that changes may be needed in entrepreneurship development policies in countries with cultural values creating barriers for women ' s entrepreneurship. Originality/value – This multi-level analysis is derived from a theoretical framework and helps account for the rates of entrepreneurial activity found among women across many countries.

Kauffman Index of Entrepreneurial Activity 1996-2010

The Kauffman Index of Entrepreneurial Activity is a leading indicator of new business creation in the United States. Capturing new business owners in their first month of significant business activity, this measure provides the earliest documentation of new business development across the country. The percentage of the adult, non-business-owner population that starts a business each month is measured using data from the Current Population Survey (CPS). In addition to this overall rate of entrepreneurial activity, separate estimates for specific demographic groups, states, and select metropolitan statistical areas (MSAs) are presented. The Index provides the only national measure of business creation by specific demographic groups. New 2010 data allow for an update to previous reports, with consideration of trends in the rates of entrepreneurial activity over the fifteen-year period between 1996 and 2010. The Kauffman Index reveals important shifts in the national level of entrepreneurial activity, and shifts in the demographic and geographic composition of new entrepreneurs across the country. Key findings for 2010 include: • In 2010, 0.34 percent of the adult population (or 340 out of 100,000 adults) created a new business each month, representing approximately 565,000 new businesses per month. The 2010 entrepreneurial activity rate is the same as the 2009 rate, but represents an increase from 2007, and represents the highest level over the past decade and a half. • The recent upward trend in entrepreneurship rates contrasts with a recent downward trend in employer business creation. From 2007 to 2010, the quarterly employer establishment birth rate dropped from 0.13 percent to 0.10 percent. Over this same period, the monthly entrepreneurship activity rate increased from 0.30 percent to 0.34 percent. These opposing trends may be due to the Great Recession and its high unemployment rates pushing many individuals into business ownership. These individuals probably were more likely to start sole proprietorships and other non-employer firms instead of starting more costly employer firms. • The entrepreneurial activity rate among Latinos increased from 0.46 percent in 2009 to 0.56 percent in 2010, reaching the highest level over the past decade and a half. • The Asian entrepreneurial activity rate also increased substantially in 2010 (from 0.31 percent to 0.37 percent). • The African-American and non-Latino white entrepreneurial activity rates decreased from 2009 to 2010. • Immigrants were more than twice as likely to start businesses each month than were the native-born in 2010. The immigrant rate of entrepreneurial activity increased sharply, from 0.51 percent in 2009 to 0.62 percent in 2010, further widening the gap between immigrant and native-born rates. The native-born rate is 0.28 percent. • The youngest age group (ages twenty-five to thirty-four) experienced an increase in entrepreneurial activity from 2009 to 2010 (0.24 percent to 0.26 percent). • Over the past decade and a half, Latinos, Asians, immigrants, and the oldest age group (ages fifty-five to sixty-four) experienced rising shares of all new entrepreneurs, partly because of rising rates of entrepreneurship, but also because of increasing populations. • Entrepreneurship rates increased the most for high school dropouts (0.49 percent to 0.59 percent), and decreased the most for high school graduates (0.38 percent to 0.34 percent) in 2010, also signaling that opposing trends may be due to the Great Recession pushing many individuals into business ownership because of high unemployment rates. • The construction industry had the highest rate of entrepreneurial activity of all major industry groups in 2010 (1.60 percent). The second-highest rate of entrepreneurial activity was in the services industry (0.44 percent). • The entrepreneurial activity rate increased in the West from 0.38 percent in 2009 to 0.41 percent in 2010. Business-creation rates decreased in the Northeast and Midwest and remained the same in the South. • The states with the highest entrepreneurial activity rates were Nevada (510 per 100,000 adults), Georgia (510 per 100,000 adults), California (470 per 100,000 adults), Louisiana (460 per 100,000 adults), and Colorado (450 per 100,000 adults). The states with the lowest entrepreneurial activity rates were West Virginia (170 per 100,000 adults), Pennsylvania (180 per 100,000 adults), Wisconsin (180 per 100,000 adults), South Dakota (190 per 100,000 adults), and Indiana (190 per 100,000 adults). • The states experiencing the largest increases in entrepreneurial activity rates over the past decade were Georgia (0.23 percentage points), Nevada (0.19 percentage points), Tennessee (0.14 percentage points), Massachusetts (0.13 percentage points), California (0.11 percentage points), Texas (0.11 percentage points), Kentucky (0.11 percentage points), and Florida (0.10 percentage points). The states that experienced the largest decreases in their rates were Wyoming (-0.18 percentage points), New Mexico (-0.14 percentage points), and Alaska (-0.13 percentage points). • Among the fifteen largest MSAs in the United States, the highest entrepreneurial activity rate in 2010 was in Los Angeles (0.62 percent). The large MSA with the lowest entrepreneurial activity rate was Philadelphia (0.15 percent).

Kauffman Index of Entrepreneurial Activity 1996-2012

The Kauffman Index of Entrepreneurial Activity is a leading indicator of new business creation in the United States. Capturing new business owners in their first month of significant business activity, this measure provides the earliest documentation of new business development across the country. The percentage of the adult, non-business owner population that starts a business each month is measured using data from the Current Population Survey (CPS).The Index captures all types of business activity and is based on nationally-representative sample sizes of more than an half million observations each year. In addition to this overall rate of entrepreneurial activity, separate estimates for specific demographic groups, states, and select metropolitan statistical areas (MSAs) are presented. The Index provides the only national measure of the rate of business creation by specific population groups.

The Kauffman Index of Entrepreneurial Activity: 1996-2012

Author(s): Fairlie, Robert | Abstract: The Kauffman Index of Entrepreneurial Activity is a leading indicator of new business creation in the United States.n Capturing new business owners in their first month of significant business activity, this measure provides the earliest documentation of new business development across the country.n The percentage of the adult, non-business owner population that starts a business each month is measured using data from the Current Population Survey (CPS).The Index captures all types of business activity and is based on nationally-representative sample sizes of more than an half million observations each year. In addition to this overall rate of entrepreneurial activity, separate estimates for specific demographic groups, states, and select metropolitan statistical areas (MSAs) are presented.n The Index provides the only national measure of the rate of business creation by specific population groups.

Towards understanding female entrepreneurship in Middle Eastern and North African countries

PurposeOver the past 30 years there has been an increase in the number of women turning to self‐employment and business ownership. Middle Eastern women were no exception and increasingly are pursuing entrepreneurship and have become a phenomenon that requires in‐depth study and analysis. The purpose of this paper is to shed light on women entrepreneurs in terms of entrepreneurial activity rates, entrepreneurial orientations, demographics and their enterprise characteristics in the Middle East and North Africa (MENA) countries.Design/methodology/approachThe approach utilised is a combination of the literature pertinent to women's entrepreneurship in MENA with the findings of the Global Entrepreneurship Monitor's research for 2008‐2009.FindingsMore women are turning into entrepreneurship in Middle East; however, their percentage is still low compared to their male counterparts.Research limitations/implicationsOne of the main limitations was the lack of literature discussing women entrepreneurship in the Middle Eastern context and reliable statistics.Originality/valueThis paper is one of few papers discussing and comparing women entrepreneurs in eight Middle Eastern countries, along with their enterprises.

Exploring country-level institutional arrangements on the rate and type of entrepreneurial activity

This study introduces a novel multidimensional measure of the entrepreneurial environment that reveals how differences in institutional arrangements influence both the rate and the type of entrepreneurial activity in a country. Drawing from institutional theory, the measure examines the regulatory, normative, and cognitive dimensions of entrepreneurial activity, and introduces a novel conducive dimension that measures a country's capability to support high-impact entrepreneurship. Our findings suggest that differences in institutional arrangements are associated with variance in both the rate and type of entrepreneurial activity across countries. For the formation of innovative, high-growth new ventures, the regulative environment matters very little. For high-impact entrepreneurship an institutional environment filled with new opportunities created by knowledge spillovers and the capital necessary for high-impact entrepreneurship matter most.