Total Entrepreneurial Activity Research Articles

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.

Senior entrepreneurship in Latin America: evaluation and support from entrepreneurship ecosystems approach

Purpose The purpose of this study is to make an exploratory analysis of the impact of the entrepreneurial ecosystem (EE) as defined by Acs et al. (2014) on opportunity-driven senior entrepreneurial activity in Latin America. Design/methodology/approach The research uses data from the Global Entrepreneurship Monitor and the Global Entrepreneurship and Development Institute of five Latin America countries (Argentina, Brazil, Chile, Colombia and Mexico), providing a total of 15,019 observations of people that are 50+ years old, between the years 2013 and 2017. A multi-level logistic regression model was used to estimate the relation between the total entrepreneurial activity by opportunity of seniors and some EE indicators. A total of three equations were estimated on the data set described. Findings This research confirms the relevance of some elements of EE on senior entrepreneurship in Latin America. Entrepreneurial attitudes have a positive relationship with senior entrepreneurs, generating higher levels of entrepreneurial ventures. The combination of institutions that support these attitudes on the EE enhances senior entrepreneurial activity. It also demonstrates that a higher level of entrepreneurial education at postschool stages is relevant to increasing senior entrepreneurial activity. Originality/value This research makes some interesting contributions in the field of measuring the impact of EE on senior entrepreneurship by opportunity in developing countries, filling a literature gap. It allows us to glimpse some measures that policymakers could take to improve the entrepreneurial activity of this segment in the region, such as implementing programs that facilitate networking opportunities and mentorship, along with providing training in business and financial literacy.

Entrepreneurship performance in the EU: To what extent do economic, social, and government conditions matter?

AbstractEntrepreneurship is widely recognized as a key driver of economic development. At the same time, entrepreneurship is also affected by the economic conditions of the regions where it evolves. In the literature, negative impacts on entrepreneurial performance have been linked to the 2008 financial crisis in the European Union (EU). However, not enough evidence has been provided to support this assertion. To fill this gap, we tested the relationship between economic, social, and government conditions and entrepreneurial performance. We did this for opportunity entrepreneurship (OPP), necessity entrepreneurship (NEC), and total entrepreneurial activity (TEA), for the period 2003–2018, which covers before, during, and after the financial crisis. We considered 21 EU countries and applied descriptive, correlation, and multiple linear regression analyses. Our results demonstrate that (a) there is a positive and significant correlation between NEC and OPP, GDP per capita and OPP, unemployment and TEA, gender ratio and age, gender ratio and education, education and TEA, population and NEC, government indicators and GDP per capita, and government expenditure and NEC, and a negative and significant correlation between GDP per capita and TEA and (b) economic and government conditions had a negative impact on TEA, in contrast to a positive and negative impact on NEC. Social conditions are mixed for TEA and NEC and positive for OPP. The effects on economic conditions were mixed for OPP. Therefore, our study impacts practitioners by demonstrating the factors that do or do not impact entrepreneurial activity in the EU. Additionally, our study expands upon previously analyzed factors that influence entrepreneurial performance, promoting value and originality in the area.

Immigration and entrepreneurship: Is there a uniform relationship across countries?

This article has two objectives. Firstly, it examines the heterogeneous effects of the immigrant share on entrepreneurial activities. Secondly, it analyzes how national culture moderates the relationship between immigration and entrepreneurship activities. Using data from the Global Entrepreneurship Monitor (GEM), we form a cross-sectional data set of 630,139 observations from 69 nations covering the period of 2012–2015, and use a grouped logit modeling approach. Building on the knowledge spillover and mixed embeddedness theories, our results reveal that the immigrant share is strongly associated with the likelihood for individuals to engage in entrepreneurship of different types—opportunity-driven, necessity-driven, export-oriented, and growth-oriented. Further analysis indicates that, although the immigrant share has a significant association with total entrepreneurial activities; there is no consistency across countries. Specifically, a one-standard deviation increment in the migrant share decreases the likelihood of total entrepreneurial activities (TEA) by 0.7 and 7.3 percentage points in the full sample and in middle-income countries, respectively. However, TEA benefits from immigration in high-income countries. Although national culture moderates the nexus between immigration and entrepreneurship, we find that cultural dimensions have a greater impact on middle-income countries entrepreneurial activities than on those of high-income countries.

The entrepreneurial mindset and self-employment intention of high school learners: The moderating role of family business ownership

Entrepreneurship, through successful business venturing, plays a pivotal role in a nation’s endeavor to create jobs and boost the economy. The Global Entrepreneurship Monitor (GEM) reports state that South Africa’s early stage total entrepreneurial activity (TEA) is lower than most countries that are at comparable levels of development. Therefore, the entrepreneurial mindset of high school learners and its influence on self-employment intention were assessed in this study. Also, the moderating effect of family business ownership on the relationship was measured. The data collected from 320 learners in randomly selected 10 high schools in Gauteng were analyzed using hierarchical regression analysis. The study finds that the level of an entrepreneurial mindset is above average, which provides the potential for a higher total entrepreneurial activity (TEA) in the future. Both entrepreneurial skills and entrepreneurial traits significantly influence self-employment intention, while learners’ family business background moderates the relationship. The study establishes the entrepreneurial mindset level of high school students in a country with one of the lowest TEA in the world, South Africa, where (possibly) the latest entrepreneurial mindset measure, the Entrepreneurial Mindset Profile (EMP) instrument is used. Also, it’s unique in testing the role of family business background in intensifying the entrepreneurial mindset toward self-employment intention. Therefore, the Department of Basic Education should aim to tap into the existing desire in high school learners and develop a curriculum that integrates theoretical and experiential learning. It is expected that this intervention will improve the future TEA of the country.

Impact of green entrepreneurship on sustainable development: An ex-post empirical analysis

This paper contributes to the recent stream of econometric entrepreneurship research by introducing the environmental orientation of new ventures as a key factor for sustainable development. It empirically assesses whether relationships exist between national shares of green entrepreneurial activity (GEA) and economic, social, and environmental development. Theory and first empirical evidence suggest that – compared to conventional new ventures – new green ventures have a more positive economic and social impact and are less harmful or even beneficial to environmental quality. OLS regressions were estimated to empirically test the impact of GEA rates (share of total entrepreneurial activity) on GDP, the modified HDI, and CO2 emissions. For this purpose, Global Entrepreneurship Monitor data for 11,909 early-stage entrepreneurs was aggregated to the macro-level of 53 countries and merged with further international datasets. The results confirmed that higher shares of GEA are positively related to economic and social development but not to environmental development. Additional tests proved the robustness of the results for different economic development levels, time-lag variations, and different measurements of dependent and independent variables. The identified economic and social importance of GEA warrants intensified policy efforts to support the discovery, creation, and exploitation of green business opportunities. Potential explanations for the counterintuitive non-significant environmental impact are discussed, leading to new research avenues.

The Importance of Entrepreneurship on Economic Development. Evidence From the OECD Countries

The process of a country's economic growth and development is a very complex phenomenon, influenced by numerous factors, which has attracted the attention of researchers and policymakers over time. Several studies highlight the important role of entrepreneurship on economic growth, by introducing innovative technologies, creating new products, promoting new jobs and employment opportunities, but also improving competition and competitiveness. Although the impact of entrepreneurship on economic growth has been broadly analysed in the economic literature over the recent years, few studies have examined the impact of entrepreneurship on economic development. The aim of this paper is to fill this gap, using the Human Development Index (HDI) as a suitable proxy for measuring economic development, taken from the United Nations statistics. HDI is a composite measure of average achievement in key dimensions of human development, such as, life expectancy, education level and standards of living. On the other hand, Entrepreneurship is measured by Total Entrepreneurial Activity (TEA) taken from the Global Entrepreneurship Monitor, which expresses the percentage of population with age between 18 and 64, who are either a nascent entrepreneur or owner-manager of a new business. The empirical model is drawn from the endogenous growth theory, assuming that entrepreneurship and human capital skills are the key drivers of economic development, along with capital stock. The empirical analysis is based on unbalanced panel data regressions for a sample of 37 OECD countries using annual data for the period 2000-2018. Estimating a dynamic panel data model by using the GMM two-step system approach, we obtain evidence indicating the positive association between the development level and entrepreneurship, as well as the positive impact of human capital and capital stock on development. Our empirical results are in line with the endogenous growth theory approach, showing that entrepreneurship can be considered as an additional factor input in the countries’ economic development pathway.

The Export of Medium and High-Tech Products Manufactured in Europe

In this article we analyze the determinants and the export trend of European countries of medium and high technology products. The data were analyzed using various econometric models, namely WLS, Pooled OLS, Dynamic Panel, Panel Data with Fixed Effects, Panel Data with Random Effects. The results show that exports of medium and high-tech products are positively associated, among other variables, with the value of “Average Annual GDP Growth”, “Total Entrepreneurial Activity” and “Sales Impacts”, and negatively associated with, among other variables, “Human Resources”, “Government and Procurement of Advanced Technology Products” and “Buyer Sophistication”. A cluster analysis was realized with the k-Means algorithm optimized with the Silhouette coefficient. The result showed the presence of only two clusters. Since this result was considered poorly representative of the industrial complexity of the European Union countries, a further analysis was carried out with the Elbow method. The result showed the presence of 6 clusters with the dominance of Germany and the economies connected to the German economy. In addition, a network analysis was carried out using the distance to Manhattan. Four complex network structures and two simplified network structures were detected. A comparison was then made between 10 machine learning algorithms for predicting the value of exports of medium and high-tech products. The result shows that the best performing algorithm is the SGD. An analysis with Augmented Data-AD was implemented with a comparison between 10 machine learning algorithms for prediction and the result shows that the Linear Regression algorithm is the best predictor. The prediction with the Augmented Data-AD allows to reduce the MAE by about 0.0022131 compared to the prediction with the Original Data-OD.

FACTORS AFFECTING OPPORTUNITY AND NECESSITY-DRIVEN INTENTIONS OF ENTREPRENEURS: THE CASE OF SOUTH EAST EUROPE

We investigated the factors influencing the intention of entrepreneurs driven by opportunity (ODE) and entrepreneurs driven by necessity (NDE) in the countries of South-East Europe (SEE). The aim of the paper was to identify the key factors of entrepreneurial intentions of ODE/NDE and to propose measures the application of which can transform NDE into ODE and increase the contribution of total entrepreneurial activity to economic development. The Binomial Logistics Regression and Ordinary Logistics Regression were applied, using data for 125,444 entrepreneurs in seven countries of SEE. Our findings highlight that the intention of ODE is most influenced by entrepreneurial knowledge and experience, entrepreneurial alertness and social contacts and networks, while unemployment (as a work status) and low household income have a significant impact on the intention of NDE. The fear of failure has a negative influence on the intentions of both groups of entrepreneurs, but its impact is much more accentuated in NDE than in ODE.

Does Foreign Direct Investment Facilitate Entrepreneurial Activities? Evidence from BRICS Countries

This article investigates the impact of foreign direct investment (FDI) on the entrepreneurial activities in Brazil, Russia, India, China and South Africa (BRICS nations) by assessing the influence of both inward and outward FDI during the period of 2002–2019. We resort to a fixed as well as random effect model on the panel data of five nations, that is BRICS. The article also explored the reverse impact of total entrepreneurial activities (TEA) on inward and outward FDI. The results highlight that inward FDI has a positive impact on entrepreneurial activities while outward FDI has a negative influence on entrepreneurial activities in BRICS nations. Nevertheless, the TEA have a positive and significant impact on inward FDI, while relationships between outward FDI and TEA are found to be insignificant in BRICS economies. In addition, economic growth is also found to be important factor to encourage FDI. The results suggest that more inward FDI should be encouraged to provide innovation and markets to entrepreneurs, as they are the bridge between invention and commercialization.

Entrepreneurship and economic growth in emerging markets: An empirical analysis

AbstractPolicy makers must identify the priorities in which resources should be invested in order to stimulate growth. This requires the identification of drivers of economic growth. Numerous researchers have pointed out that entrepreneurship is one of the key drivers of growth in the developed countries. However, sometimes entrepreneurship can be “unproductive”, and even “destructive”, because different forms of entrepreneurship do not have the same impact. Our paper investigates the impact of different types of entrepreneurships on growth in the emerging markets in order to identify the productive forms of entrepreneurship. The regression results, from panel data analysis of 20 emerging countries for the period of 2011–2018, showed that total entrepreneurial activity has a positive impact on economic growth in the emerging markets, but this impact is not statistically significant. The greatest and significant contribution to economic growth has high-growth expectation entrepreneurship. The influence of innovative entrepreneurship on economic growth is positive, but statistically insignificant, while impact of necessity-driven entrepreneurship is negative. Necessity-driven entrepreneurship and informal entrepreneurship are unproductive and destructive forms of entrepreneurship in the emerging markets.

EXAMINING THE RELATIONSHIP BETWEEN ECONOMIC FREEDOM, INCOME AND ENTREPRENEURSHIP IN SOUTH AFRICA: A VECM APPROACH

Entrepreneurship is an integral part of change and development, contributing positively to employment, poverty reduction and income growth. It flourishes in an institutional context of freedom rather than suppression. This paper examines the relationship between economic freedom, income and entrepreneurship in South Africa, using (1994–2019) time-series data. Economic freedom was measured by the Economic Freedom Index (FREE) as a proxy. Income and early-stage entrepreneurship were proxied by gross domestic product per capita (GDPC) and total entrepreneurial activity (TEA), respectively. Johansen cointegration tests and a vector error correction model (VECM) were used to estimate the short- and long-run associations between the variables. The results indicate a bi-directional short- and long-run cointegrating relationship between freedom and entrepreneurship; freedom is also found to be a significant predictor of GDPC in South Africa. Thus, improvements in real per capita GDP and economic freedom tend to enhance early-stage entrepreneurship, providing greater scope for business formations. Hence, a mindset change from radical economic transformation to pro-economic freedom might help in stimulating entrepreneurship.

The impact of the institutional environment on entrepreneurial activity: an analysis of developing and developed countries

PurposeEntrepreneurship can be understood as a systemic phenomenon, thus relying on sets of influential factors associated with socioeconomic contexts. Institutional conditions play a pivotal role in this regard, affecting the allocation of entrepreneurial efforts. The goal of this research is to verify to what extent do the pillars of Countries' Institutional Profiles – regulatory, cognitive and normative – affect both the prevalence and quality of entrepreneurship, assessing the differences between developing and developed countries both in total entrepreneurial activity and in the following qualitative frames: innovation rate, high job creation expectations and motivational index.Design/methodology/approachThe authors’ assessment uses data from the Global Entrepreneurship Monitor (GEM) with a longitudinal approach for 112 countries over the period 2003–2019. Dynamic panel data regressions are applied.FindingsBy comparing developing and developed countries, findings highlight that institutional effects are heterogeneous among developing and developed countries, with informal institutions being more relevant for developing countries than formal ones. Also, using a broad range of institutional indicators, the authors’ assessment indicated that the association between institutional conditions and productive entrepreneurship seems to be far more intricate than argued by theoretical literature.Practical implicationsThe authors’ findings indicate the need for developing countries to address formal institutional voids in order to generate more effective conditions for productive entrepreneurship to emerge. Following prior literature, this can have systemic impacts on trajectories for economic growth and development.Originality/valueThe originality of this research consists in using a longitudinal and integrative approach to compare institutional effects on different types of entrepreneurship, as well as comparing these effects in countries at different stages of development.

Institutional factors, religiosity, and entrepreneurial activity: A quantitative examination across 85 countries

• The results reveal that government effectiveness is negatively related to total entrepreneurial activity. • The introduction of political freedom as a mediator between government effectiveness and entrepreneurship yields a positive relationship. • Religiosity moderates the indirect effect of government effectiveness on total entrepreneurial activity through political freedom. • The indirect effect will be stronger under low levels of religiosity than under high levels of religiosity. Given the ongoing debate on the relationship between institutions and entrepreneurship, this study aims to better understand the joint effects of two country-level formal institutions, government effectiveness and political freedom, and whether the informal institution of religiosity moderates this relationship. To achieve this goal, the current study used multiple datasets, including the Global Entrepreneurship Monitor (GEM), World Governance Indicators (WGIs), and the WIN-Gallup International Global Index of Religiosity and Atheism. The data cover 85 countries from 2010 to 2017. The results suggest that the rate of entrepreneurial activity across nations is shaped by the interplay between formal and informal institutions.

Entrepreneurship and Small Island Economies

Over the past two decades, the study of entrepreneurship and its importance to the economy has increased in appeal to academics, practitioners and governments. This study explores entrepreneurship in small island economies within regions based on Total Entrepreneurial Activity (TEA) and Established Business Ownership (EBO) as observed in the Global Entrepreneurship Monitor (GEM) dataset. This research uses the pooled regression model to study the impact of TEA and EBO on economic growth. The findings highlight that new venture creation is a driver that improves gross domestic product (GDP); however, there are significant differences across SIDS in the orientation of TEA and EBO that suggest that other contextual issues like culture, education system, and entrepreneurial support elements influence entrepreneurial behaviour across regions as well. The more advanced of these nations like Singapore and Puerto Rico benefit from knowledge networks and scientific mobility, while the smaller economies in the Caribbean and Pacific Region show less openness to pursuing entrepreneurial endeavours. These findings provide a foundation for further research on varying types of combinations of both economic factors and contextual differences that lend to the transitioning process towards an emerging economy.

ICT and entrepreneurship: A comparative analysis of developing, emerging and developed countries

In this study, we investigate the impact of information and communication technologies (ICTs), represented by ICT capital services, on total entrepreneurial activity (TEA) in developing, emerging and developed countries with particular attention on countries’ absorption capacities over the period 2006-2016. First, our results suggest a positive relationship between ICT capital services and entrepreneurship in the whole sample. Second, while the results concerning subsamples are larger in developing and emerging countries than in developed countries, the comparisons do not reveal statistically significant differences in the contribution of ICT capital services to entrepreneurship in these three groups of countries. Thus, regarding the benefits of ICTs in promoting entrepreneurship, developing and emerging countries are not earning more than the developed economies. This challenges the argument that these countries are ‘leapfrogging’ through ICT. Concerning the absorption capacity, we find that secondary school enrolment is the best channel of ICT entrepreneurial effect, not tertiary school enrolment, and innovation is a complement to ICT in promoting entrepreneurship only in emerging countries and developed countries, but not in developing countries.

Environmental Consciousness of Entrepreneurs in Ghana: How Do Entrepreneur Types, Demographic Characteristics and Product Competitiveness Count?

Businesses are believed to be partly responsible for upsetting the balance of local biodiversity through activities that degrade the environment. Critically, entrepreneurship is increasingly being cited as a key sector that can bring about sustainable transformation in production and distribution. Ghana’s total entrepreneurial activity rate is estimated at 37%, with businesses operating unsustainably. Meanwhile, little has been explored empirically on the factors that influence businesses’ sensitivity to the environment in Ghana. Using the 2013 GEM data in estimating seven different logic regression models coupled with a qualitative analysis, this paper fills the gap by investigating how the demographic and entrepreneurial characteristics of entrepreneurs in Ghana influence their environmental consciousness. The empirical evidence suggests that education fosters environmental consciousness, while owner-manager and female entrepreneurs as well as rural locality entrepreneurs in Ghana tend to be more environmentally sensitive. The qualitative data also revealed general concerns for the environment as motivating factors for entrepreneurs to be more environmentally conscious. The findings therefore draw attention to the inadequate focus on green entrepreneurship in Ghana. Embarking on educational campaigns to promote the adherence to environmental regulations by all businesses, especially those in urban areas, could help build a robust eco-preneurship landscape in Ghana.

Cultural Institutions, Women Entrepreneurs and High-Growth Entrepreneurship

In this study, we set out to address important research questions: How do economic, political, education and health gender gaps influence total entrepreneurial activity? How do social costs of failure affect the relationship between gender gaps and total entrepreneurship activity? Are these effects the same for the distinct and important facet of high growth entrepreneurship? We applied a legitimacy theory framework, reasoning that smaller gender gaps connote the legitimacy of women entrepreneurs. We further conjectured that preexisting perceptions and challenges to the fit of women in the entrepreneurship domain are magnified in institutional contexts with high social costs of failure. We found that in societies with smaller gender gaps, there are increased levels of both total entrepreneurship activity and high-growth entrepreneurship activity, and that these relationships are moderated by the social costs of failure.

The impact of Greenfield investment on domestic entrepreneurship

The FDI-entrepreneurship nexus has received growing attention over the last decade. However, the empirical findings on their relationship have been inconsistent at best. This study seeks to examine how the inflows of Greenfield investment influence entrepreneurship of the host country. Using panel data from 110 countries during the period 2001-2018, we find that growing level of Greenfield investment brings detrimental impact on the level of total and opportunity-driven entrepreneurial activities in the host countries while the impact on necessity-driven entrepreneurship have been mixed. The results regarding the impact of Greenfield investment on total entrepreneurial activities and opportunity-based entrepreneurial activities are robust across different econometric settings, different time span, and different categories of control variables.

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.