Total Early-stage Entrepreneurial Activity Research Articles

Globalization, entrepreneurial development and unemployment: a mediation analysis in the context of South Africa

PurposeThis study clarifies the intricate nature of globalization's impact on unemployment rates in South Africa. Given the heterogeneous views on globalization's effect on economic development, this study aims to offer a nuanced perspective. Furthermore, it aims to explore the mediating role of entrepreneurial development in shaping the complex relationship between globalization and unemployment.Design/methodology/approachThe study employs four key indicators to measure entrepreneurial development, globalization and unemployment rates in South Africa. Hierarchical regression is used to evaluate the relationship between globalization and unemployment rates, and how entrepreneurial development mediates this relationship. Additionally, both the Sobel test and bootstrapping analyses were employed to verify and validate the mediating relationship.FindingsThe study demonstrates that globalization constitutes a crucial determinant of (un)employment rates in South Africa. The study shows that entrepreneurial development, specifically in the context of established business ownership, but not total early-stage entrepreneurial activity, exhibits an inverse relationship with unemployment rates. Moreover, it was observed that the positive impact of globalization on entrepreneurial development in South Africa becomes evident as SMEs advance to the established stage.Research limitations/implicationsThe study's concentration on South Africa constrains the applicability of the results to other nations.Practical implicationsBased on the findings of this study, it is essential for emerging economies, such as South Africa, to take measures to foster a robust entrepreneurial ecosystem that can aid in the growth and international competitiveness of young SMEs.Originality/valueTo the best of the authors' knowledge, this study represents the first endeavor to analyze the potential impact of entrepreneurial development, as measured by both nascent and mature SMEs, on the correlation between globalization and unemployment.

Business environment reforms effect on entrepreneurial activities of high-income economies: panel data evidence

PurposeEntrepreneurship is an activity of recognised economic and social interest, leading scholars to examine contextual factors that justify variations between economies and governments to configure more favourable conditions to entrepreneurial activity. In this sequence, this study aims to analyse the effect of reforms produced in the business environment on entrepreneurial rates of a set of 18 high-income economies.Design/methodology/approachA panel data (2010–2019) methodology was adopted using 10 Doing Business indicators from World Bank and Total early-stage Entrepreneurial Activity (TEA) from Global Entrepreneurship Monitor (GEM).FindingsIn the light of institutional theory, the study shows that improving the business environment for entrepreneurs does not ensure an increase in TEA. Specifically, only the indicators Dealing with Construction, Registering Property and Enforcing Contracts positively impacted the TEA.Originality/valueThis is the first study that monitors and provides evidence regarding the effectiveness of business environment reforms towards entrepreneurship. The authors provide considerable theoretical-practical implications for scholars, entrepreneurs and policymakers to restructure public policies to support entrepreneurial activity.

Empowering Women Entrepreneurs in Brazil: An Analysis of 2010-2019 Trends

This study undertakes a succinct literature review to delve into the importance of female entrepreneurship in Brazil, particularly focusing on the period from 2010 to 2019. By scrutinizing Brazilian Gross Domestic Product (GDP) data and referencing reports from the Global Entrepreneurship Monitor (GEM), the research effectively situates female entrepreneurship within the Brazilian economic context. Employing metrics such as Total Early-stage Entrepreneurial Activity (TEA) Rate, Established Business Ownership Rate (EBO), and Total Entrepreneurship Rate (TER), the study delves into the Total Early-stage Entrepreneurial Activity Rate across diverse demographics including age groups, income ranges, education levels, and sectors. Through correlation analysis and dispersion diagrams, intricate connections emerge between early-stage entrepreneurial rates and variables such as age, income, education, and sectors. This research unveils the profile and significance of Brazilian entrepreneurs, underscoring the pivotal role of women in nurturing economic and societal progress. Elevating women's participation in entrepreneurship emerges as a cornerstone for transformative societal change, embodying ideals of self-sufficiency and empowerment. This research is classified within the realms of bibliographic, documentary, descriptive, and exploratory methodologies. Notably, the study reveals that female entrepreneurship significantly contributes to Brazil's economic advancement, fostering both economic and social development.

The effect of high-growth and innovative entrepreneurship on economic growth

Scholars and policymakers have recognized the importance of entrepreneurship to enhance national development. Yet, it can be difficult to identify what type of entrepreneurship is relevant to promote. This article analyzes the contribution of high-growth and innovative entrepreneurship to country-level economic growth. The entrepreneurship variables used were derived from Global Entrepreneurship Monitor (GEM) microdata, enabling us to test alternative configurations of the indicators frequently used in the literature. We also construct an innovative entrepreneurship measure based on product innovation, new technology implementation, and export intensity. Our main findings reveal that innovative entrepreneurship is positively related to economic growth, while no relationship with high-growth entrepreneurship is suggested. Last, using Bayesian model averaging (BMA), we find innovative entrepreneurship and the total early-stage entrepreneurial activity to be robust determinants of economic growth.

Do refugee inflows contribute to the host countries’ entrepreneurial rates? A dynamic panel data analysis, 2000–2019

PurposeThis study aims to estimate the impact of refugee inflows on host countries’ entrepreneurial rates. The refugee crisis led to an increased scientific and public policy interest in the impact of refugee inflows on host countries. One important perspective of such an impact, which is still underexplored, is the impact of refugee inflows on host countries entrepreneurial rates. Given the high number of refugees that flow to some countries, it would be valuable to assess the extent to which such countries are likely to reap the benefits from increasing refugee inflows in terms of (native and non-native) entrepreneurial talent enhancement.Design/methodology/approachResorting to dynamic (two-step system generalized method of moments) panel data estimations, based on 186 countries over the period between 2000 and 2019, this study estimates the impact of refugee inflows on host countries’ entrepreneurial rates, measured by the total early-stage entrepreneurial activity (TEA) rate and the self-employment rate.FindingsIn general, higher refugee inflows are associated with lower host countries’ TEA rates. However, refugee inflows significantly foster self-employment rates of “medium-high” and “high” income host countries and host countries located in Africa. These results suggest that refugee inflows tend to enhance “necessity” related new ventures and/ or new ventures (from native and non-native population) operating in low value-added, low profit sectors.Originality/valueThis study constitutes a novel empirical contribution by providing a macroeconomic, quantitative assessment of the impact of refugee from distinct nationalities on a diverse set of host countries' entrepreneurship rates in the past two decades resorting to dynamic panel data models, which enable to address the heterogeneity of the countries and deal with the endogeneity of the variables of the model.

Impact of Entrepreneurial Activity and ICT Development on Sustainable Development: Evidence from High-Income Countries

Sustainable development has become a vital issue in the globalizing world given the food insecurity, climate change, significant degradation of the environment and depletion of natural resources, and biodiversity loss. Therefore, the identification of the key factors behind sustainable development is important for the planning and application of the proper policies by countries. In this context, the institutional, demographic, social, and economic determinants of overall sustainable development have been extensively explored, but the interplay among sustainable development, entrepreneurial activity, and ICT development has stayed relatively untouched. This article investigates the effect of entrepreneurial activity, proxied by total early-stage entrepreneurial activity and ICT development, on the overall sustainable development of 15 high-income countries over the 2002–2018 period; it uses the Westerlund and Edgerton cointegration test with a structural break, taking notice of the gap in the empirical literature regarding the determinants of sustainable development. The cointegration analysis shows that entrepreneurial activity and ICT development have a positive influence on sustainable development in the long run, but that the effect of ICT on overall sustainable development is shown to be stronger in comparison to entrepreneurial activity. ICT penetration and entrepreneurial activity should be encouraged through institutional, educational, and fiscal incentives to make progress in sustainable development.

The impact of infrastructure and entrepreneurship support programs on the Female TEA Ratio: A PMG-ARDL approach in an urban context

The purpose of this article is to improve our understanding of the factors that influence the Female/Male Total Early-stage Entrepreneurial Activity (TEA) ratio in urban environments. Its goal is to provide policymakers with a solid scientific foundation as well as to suggest new research directions in the field of female entrepreneurship. The study focuses on how macroenvironmental factors influence the Female/Male TEA Ratio in urban contexts within BRICS countries. Several key factors are considered in the analysis, including entrepreneurial finance, government support policies, entrepreneurship support programs, commercial and legal infrastructure, and physical infrastructure. The research findings confirm the hypothesis that commercial and legal infrastructure, as well as government measures to support entrepreneurship, have a negative long-term influence on the Female/Male TEA Ratio by using the PMG-ARDL method and examining data from the Global Entrepreneurship Monitor (GEM). Furthermore, the findings show that entrepreneurship support programs and physical infrastructure have a positive impact on the ratio. However, no significant impact on entrepreneurial finance has been observed in both the short and long term. The article emphasizes the importance of taking into account the regional dimension when developing entrepreneurship support policies, as well as the unique characteristics of each urban area.

Perceived obstacles to the early-stage entrepreneurial activity of youth

Purpose: The fundamental driving force of entrepreneurship is the individual with their ambitions and entrepreneurial spirit, but also with their obstacles that prevent them from following an entrepreneurial path. These obstacles can be of a personal nature, but also factors of the immediate living environment, the prevailing cultural values, the general attitude of society towards entrepreneurship, etc. The purpose of this paper is to discuss the known barriers to early-stage youth entrepreneurship compared to the total population based on the Global Entrepreneurship Monitor (GEM) data for the 34 countries studied.Methodology: The methodology includes frequency distribution, descriptive statistics and linear regression analysis. Data from GEM 2016-2020 on early-stage entrepreneurial activity, perceived skills, and fear of failure were used. Results: We showed that there are differences in perceived entrepreneurial skills between youth and the total population, namely that youth perceive lower levels of entrepreneurial knowledge, experience, and skills. We confirmed that perceived entrepreneurial skills have a positive, statistically significant impact on total early-stage entrepreneurial activity, which is true for both the total population and youth. The test of the influence of fear of failure on total early-stage entrepreneurial activity for a sample of the total population and youth indicates a negative influence, but it is not statistically significant.Conclusion: From the study, recommendations emerge for policymakers regarding entrepreneurship education as a key intervention to help youth acquire and develop relevant entrepreneurial skills that are thus beneficial for the youth to better overcome obstacles in the business environment as well as in various life situations.

The Impact of South Africa’s Total Early-stage Entrepreneurial Activity Rate on Entrepreneurial Attitudes and Behavior

Given that entrepreneurship scholars use various approaches to measure entrepreneurial success, which leads to inconsistent findings, in this study we investigate the impact that South Africa’s total early-stage entrepreneurial activity (TESEA) rate has on the entrepreneurial attitudes and behavior of South Africans and their reactions to different macroeconomic factors. Secondary datasets were elicited from the World Bank’s world development indicators and the Global Entrepreneurship Monitor (GEM) database from 2003–2014. Using a generalized linear model (GLM) poisson regression, we affirmed the statistical significance of these relationships, as well as enhanced the validity and reliability of the quantitative estimation procedure. We found that the TESEA rate is positively associated with a higher ease of doing business and entrepreneurial intention level. Furthermore, we found that when entrepreneurship is viewed as a good career choice, and given media visibility, the TESEA rate increases, and vice versa. It was also observed that the GDP per capita (which relies on efficiency, innovation and optimal utilization of market knowledge), as well as the level of economic freedom in South Africa, positively impacts the nation’s TESEA rate. Likewise, we found that the unemployment rate is positively associated with the TESEA rate of South Africa. South Africa’s TESEA rate is influenced by a combination of factors due to the dynamic nature of individual traits. However, the TESEA rate has a remarkable impact on South Africa’s entrepreneurial decision making. This implies that a targeted approach is more relevant when implementing both private and government policy initiatives.

Gender inequality and the entrepreneurial gender gap: Evidence from 97 countries (2006–2017)

Although it seems almost a stylized fact that females are less likely than males to start new ventures, closing this gender gap is essential to foster sustainable economic growth. In this study, we analyze whether gender inequality, as measured at the country level by the World Economic Forum since 2006, is associated with the gender gap in entrepreneurship. By analyzing country-level information about gender inequality (97 countries) in combination with individual-level data from the Global Entrepreneurship Monitor (1,905,665 individuals) from the years 2006 to 2017, we find that in more gender equal countries involvement in total early-stage entrepreneurial activity (TEA) is higher. Gender inequality moderates the effect of gender on TEA, by almost closing the gender gap in entrepreneurship in the most gender equal countries. We show that gender inequalities in economic participation and opportunity as well as in political empowerment are the main drivers of this interaction effect. We find similar patterns when distinguishing between opportunity-driven and necessity-driven TEA. With opportunity-driven entrepreneurship as a potential vehicle for the economic empowerment of females, our study highlights the role of policies stimulating gender equality.

Entrepreneurial fear of failure: An international comparison of antecedents and impact on venture creation

ABSTRACT Fear of failure is a key barrier in starting a business throughout the world due to the high risks involved to the founders’ finances, relationships, status, and self-esteem. Using Global Entrepreneurship Monitor data, it was observed that countries with high fear of failure have low total early-stage entrepreneurial activity for developed countries only, and that the gap between the ratio of men to women entrepreneurs in countries with high fear of failure is narrower. Countries with higher self-perceived capabilities are lower in fear of failure. However, societal norms, education, access to funding, and perceived government policy had little effect. Countries with greater economic development seem lower in fear of failure than those less developed and the higher the rate of necessity-driven entrepreneurship, the less relevant fear of failure becomes in inhibiting entrepreneurship. This article aims to understand which factors can influence fear of failure to allow governments to put in place policies to reduce this as a barrier to start-ups, which ultimately influences the country’s prospects for economic growth. This article can be used to encourage policies that can be tailored to each country’s unique ecosystem based on the underlying reasons for fear of failure in that country.

Entrepreneurial Activity and Economic Growth of BRICS Countries: Retrospect and Prospects

Entrepreneurial activity is generally considered to be an important tool for improving economic growth through innovation and employment. The objective of the study was to determine the relationship among economic growth (GDP), entrepreneurial intention (EI), total early-stage entrepreneurial activity (TEA), established business ownership (EBO) rate and high job creation expectation (HJCE) rate. The research design followed a quantitative approach to annual secondary data from 2014 to 2018 for the BRICS countries (Brazil, Russia, India, China and South Africa). The dynamic ordinary least squares model was used to test the relationship among variables. Results indicated that EI is a significant determinant for economic growth. The study added to the prior literature by confirming that EI drives economic growth which can be useful for the policymakers.

ICT Access and Entrepreneurship in the Open Innovation Dynamic Context: Evidence from OECD Countries

In recent decades, entrepreneurship has become increasingly important for innovation and economic growth. However, few studies demonstrate the role of information and communication technology systems (ICT) in promoting entrepreneurship, and even fewer studies show that ICT is a crucial resource for entrepreneurs. This study examines the direct influence of ICTs on entrepreneurial activity in OECD countries in the context of the open innovation dynamic. Based on an unbalanced dynamic longitudinal panel of data, we conclude that access to ICTs (mobile-cellular telephone subscriptions, individuals using the internet, and fixed-broadband subscriptions) positively influences Total early-stage Entrepreneurial Activity (TEA). However, the importance of ICTs for entrepreneurial activity is not equal, with mobile-cellular telephones having the strongest influence on the rate of new firm creation, followed by fixed-broadband, and internet access. This study contributes to the rationale of resource-based theory by demonstrating that ICTs are a valuable resource for boosting the capabilities for creating, collecting, processing, and interpreting information, which is vital for entrepreneurial activity. On the other hand, this study attempts to suppress an existing gap in the literature due to the still scarce studies demonstrating how macro-level ICTs affect the creation of new firms in countries. Finally, it contributed to empirically substantiating the relationship between open innovation dynamic and entrepreneurship, as very few studies do.

Entrepreneurial intention and university: A necessary relationship in regions with high level of unemployment

Purpose: Although university entrepreneurship education as a predictor of entrepreneurial intention (EI) has been verified in the academic literature, few studies have analysed its influence in regions with low entrepreneurial activity. This research provides a new point of view by contrasting students' perceptions with what entrepreneurs consider most relevant. We propose an integrative and multi-perspective framework based on expectancy theory and the theory of planned behaviour, which includes the moderating effect of gender and family imprinting. Design/methodology/approach: A valid sample of 108 business students from the University of Huelva (Spain) served as the basis of the study, whose data were analysed using consistent partial least squares (PLSc) to validate the scales and subsequently test the hypotheses. In addition, 54 valid questionnaires from local entrepreneurs were used for the comparative analysis between entrepreneurs and students. Findings: Our findings showed that the elements associated with university support have a significant, albeit negative, impact on students' intentions to become entrepreneurs. In terms of moderating variables, no significant differences were found by gender, but significant differences were found in the group with entrepreneurial parents. In relation to the determinants of entrepreneurial success, it was found that the students' conceptions of entrepreneurship were closer to those of the entrepreneurs in Huelva than to those of the successful entrepreneurs. Originality/value: This paper contributes to the academic debate on whether universities in general, and business schools in particular, should promote entrepreneurship as the core of education. We believe that these results, despite the specific and limited scope of the study, may be of great interest for university staff in regions with high levels of structural unemployment and low rates of total early-stage entrepreneurial activity (TEA) to incorporate into their academic programmes.

The value of entrepreneurship by gender on regional behaviour

This paper examines how the value of entrepreneurship by gender is related to regional behaviour. Researchers have traditionally defined entrepreneurial organization as separate to gender and to economic growth. Using the Global Entrepreneurship Monitor (GEM) we complete a dataset of 50 countries using variables such as total early-stage entrepreneurial activity (TEA) and opportunity-driven entrepreneurial activity (OPP). The methodology used proposes an analysis of regional convergence, comparing the evolution over time of both the rate of entrepreneurial activity and the ratios of opportunity-driven and need-driven entrepreneurial activity, distinguishing by gender. On the other hand, a regression model is proposed that explains the greater presence of female entrepreneurship. The results show that entrepreneurship by gender is an important factor to define different cluster of countries according to how men and women entrepreneurs create new economic opportunities.

Cross-country differences in drivers of female necessity entrepreneurship

This paper analyzes the drivers of female necessity entrepreneurship using a sample of 59 countries, with data sourced from the 2018–2019 global entrepreneurship monitor (GEM). It develops a theoretical framework describing how post-secondary education, startup skills, fear of failure, knowing another entrepreneur, entrepreneurial intentions, and hiring expectations act as drivers of female necessity entrepreneurship. Using qualitative comparative analysis, two models are tested to explain the presence and absence of female necessity entrepreneurship. This outcome is measured using the GEM indicator of total early-stage entrepreneurial activity.

The impact of entrepreneurship on economic development through government policies and citizens’ attitudes

This research aims to investigate the field of entrepreneurship in the context of public sector governance in eight of the largest economies in the world (the G7 countries and Russia). To analyse the composition and evolution of entrepreneurship, data from the Global Entrepreneurship Monitor was collected, while the economic stability was based on GDP data from the World Bank. To understand the relationships between the public sector governance policies and attitudes towards entrepreneurship in terms of economic development, the 2001-2018 period was considered. The relationships studied were observed through correlation and regression analyses, based on indexes obtained through principal component analysis. Results indicate that there are strong positive correlations between GDP and cultural and social norms promoted in society, total early-stage entrepreneurial activity, physical and services infrastructure, and tax and bureaucracy, while the fear of failure affects the GDP. Besides, this research emphasises the fact that individuals’ entrepreneurial attitudes and behaviour may reduce the level of GDP, while the entrepreneurial framework developed by the public sector would have an important role in increasing economic stability.

Entrepreneurial Career Probabilities of Adolescents

Introduction: The extent of new enterprise creation is a key driver contributing to economic, social, individual, and cultural values. Given a relatively low rate of Total Early-stage Entrepreneurial Activity (TEA) in Germany, an understanding of the predictors of adolescent entrepreneurial career preferences is critical in developing ways to foster the interest of young people in entrepreneurship. Although the late precursors of the intention to become self-employed are largely understood, only a few studies have investigated which early individual-level factors affect the subjective probability of becoming an entrepreneur. Objective: The objective of the current study is to identify and statistically examine personality factors that affect the subjective probability of adolescents becoming entrepreneurs. Methods: Based on the German Socio-Economic Panel, we employed logistic regression to research the dependence of the variable “probability of becoming self-employed” on independent variables such as gender, locus of control (LoC), and personality traits for German adolescents aged between 16–17 years. Results: The study reveals a positive influence of the personality traits conscientiousness, extraversion, and LoC on the probability of being self-employed for German adolescents aged between 16–17 years. Agreeableness and neuroticism were found to have no significant effect on the subjective probability of adolescents becoming entrepreneurs, and openness was found to have no significant impact on high likelihood of being self-employed. For adolescents, being female has a significant impact only on a medium probability to be self-employed. Conclusion: To the current body of personality models explaining early adolescent entrepreneurial career preferences, we contribute a model which refers to a representative sample of adolescents in German society.

Senior entrepreneurship in Chile: necessity or opportunity? A GEM perspective

The purpose of this paper is to study the case of Chile and identify the internal factors that lead to senior (+55 years old) entrepreneurship, either by necessity or opportunity, compared to that in other age groups.,The analysis is based on the adult population survey of the global entrepreneurship monitor between 2012 and 2016 and uses a logistic regression model that applies different variables to total early-stage entrepreneurial activity by necessity and opportunity.,Education, human and social capital development, gender and prior experience as an entrepreneur are internal factors that affect entrepreneurial activity with different weights and directions for people over 55 years old in Chile, either by necessity or opportunity. Further, certain factors exhibited by other age groups in the country explain entrepreneurship.,This study does not consider external perspectives on how context influences entrepreneurial intentions.,This paper represents a first step to understanding the factors that governments should consider when designing policies to support entrepreneurial activity in the senior demographic sector, considering differences in motivation by necessity or opportunity. In addition, this study contributes to the development of knowledge regarding senior entrepreneurship in Chile and to the identification of best practices that could be used in other regions.,This report is the first to focus on the motivations of senior entrepreneurs in Chile by quantifying the effects of different factors.

Challenges for entrepreneurship development in rural economies: the case of micro and small-scale enterprises in Ethiopia

ABSTRACT The question of why some small businesses survive and become profitable while others exit the market continues to attract attention. This study analyzes the role of the institutional environment and business formation process in entrepreneurial activity (defined by total early-stage entrepreneurial activity rate) in the context of a high populous and low institutional trust environment. We find that the government's involvement in entrepreneurship through direct support programmes, differential incentives for enterprises engaged in different sectors, and to achieve social goals and political pluralism may reduce entrepreneurial activity. Also, support programmes aimed at promoting the formation of Micro and Small-Scale Enterprises may encourage the entry of entrepreneurs lacking a business strategy that takes into account risk-return tradeoffs. By focusing on the business formation process, this study adds to the debate on the implication of government intervention programmes in entrepreneurship and small business development.