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Uncertainty avoidance and the rate of business ownership across 21 OECD countries, 1976-2004

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  • André van Stel
  • Roy Thurik
  • Sander Wennekers
  • Niels Noorderhaven

Abstract

Persistent differences in the level of business ownership across countries have attracted the attention of scientific as well as political debate. Cultural as well as economic influences are assumed to play a role. This paper deals with the influence of cultural attitudes towards uncertainty on the level of business ownership across 21 OECD countries. First, the concepts of uncertainty and risk are elaborated, as well as their relevance for entrepreneurship. An occupational choice model is introduced to underpin our reasoning at the macro-level. Second, regression analysis using pooled macro data for 1976, 1990 and 2004 and controlling for several economic variables, yields evidence that uncertainty avoidance is positively correlated with the prevalence of business ownership. According to our model, a restrictive climate of large organizations in high uncertainty avoidance countries pushes individuals striving for autonomy towards self-employment.�Regressions for these three years separately show that in 2004 this positive correlation is no longer found, indicating that a compensating pull of entrepreneurship in countries with low uncertainty avoidance may have gained momentum in recent years. Third, an interaction term between uncertainty avoidance and GDP per capita in the pooled panel regressions shows that the historical negative relationship between GDP per capita and the level of business ownership is substantially weaker for countries with lower uncertainty avoidance. This suggests that rising opportunity costs of self-employment play a less important role in this cultural environment, or are being compensated by increasing entrepreneurial opportunities.

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Bibliographic Info

Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number H200605.

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Length: 29 pages
Date of creation: 27 Jun 2006
Date of revision:
Handle: RePEc:eim:papers:h200605

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Cited by:
  1. Foreman-Peck, James & Zhou, Peng, 2009. "The Strength and Persistence of Entrepreneurial Cultures," Cardiff Economics Working Papers E2009/32, Cardiff University, Cardiff Business School, Economics Section, revised Aug 2010.
  2. Dirk Clercq & Dominic Lim & Chang Oh, 2014. "Hierarchy and conservatism in the contributions of resources to entrepreneurial activity," Small Business Economics, Springer, vol. 42(3), pages 507-522, March.
  3. Roy Thurik & Marcus Dejardin, 2012. "Entrepreneurship and Culture," Post-Print halshs-00943684, HAL.
  4. Simón-Moya, Virginia & Revuelto-Taboada, Lorenzo & Guerrero, Rafael Fernández, 2014. "Institutional and economic drivers of entrepreneurship: An international perspective," Journal of Business Research, Elsevier, vol. 67(5), pages 715-721.
  5. Francisco Liñán & José Fernandez-Serrano, 2014. "National culture, entrepreneurship and economic development: different patterns across the European Union," Small Business Economics, Springer, vol. 42(4), pages 685-701, April.
  6. María-José Pinillos & Luisa Reyes, 2011. "Relationship between individualist–collectivist culture and entrepreneurial activity: evidence from Global Entrepreneurship Monitor data," Small Business Economics, Springer, vol. 37(1), pages 23-37, July.
  7. Peter van der Zwan & Ingrid Verheul & Roy Thurik & Isabel Grilo, 2009. "Entrepreneurial Progress: Climbing The Entrepreneurial Ladder in Europe and The US," Tinbergen Institute Discussion Papers 09-070/3, Tinbergen Institute, revised 17 Mar 2010.
  8. Roy Thurik & Jolanda Hessels & Isabel Grilo & Peter van der Zwan, 2009. "Entrepreneurial exit and entrepreneurial engagement," Scales Research Reports H200910, EIM Business and Policy Research.
  9. Mayer-Haug, Katrin & Read, Stuart & Brinckmann, Jan & Dew, Nicholas & Grichnik, Dietmar, 2013. "Entrepreneurial talent and venture performance: A meta-analytic investigation of SMEs," Research Policy, Elsevier, vol. 42(6), pages 1251-1273.
  10. Bosma, Niels, 2013. "The Global Entrepreneurship Monitor (GEM) and Its Impact on Entrepreneurship Research," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 9(2), pages 143-248, February.
  11. Thai, Mai Thi Thanh & Turkina, Ekaterina, 2014. "Macro-level determinants of formal entrepreneurship versus informal entrepreneurship," Journal of Business Venturing, Elsevier, vol. 29(4), pages 490-510.
  12. Martin Carree & Andr� van Stel & Roy Thurik & Sander Wennekers, 2007. "The Relation between Economic Development and Business Ownership revisited," Tinbergen Institute Discussion Papers 07-022/3, Tinbergen Institute.
  13. Niels Bosma & Veronique Schutjens, 2011. "Understanding regional variation in entrepreneurial activity and entrepreneurial attitude in Europe," The Annals of Regional Science, Springer, vol. 47(3), pages 711-742, December.
  14. Nuno Rosa Reis & Manuel Portugal Ferreira & João Carvalho Santos, 2013. "A bibliometric study of the cultural models in International Business research," Working Papers 104, globADVANTAGE, Polytechnic Institute of Leiria.
  15. Axel Dreher & Martin Gassebner, 2013. "Greasing the wheels? The impact of regulations and corruption on firm entry," Public Choice, Springer, vol. 155(3), pages 413-432, June.
  16. Block, J.H. & Thurik, A.R. & van der Zwan, P.W. & Walter, S., 2010. "Business Takeover or New Venture? Individual and Environmental Determinants from a Cross-Country Study," ERIM Report Series Research in Management ERS-2010-042-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  17. Rosenbusch, Nina & Brinckmann, Jan & Müller, Verena, 2013. "Does acquiring venture capital pay off for the funded firms? A meta-analysis on the relationship between venture capital investment and funded firm financial performance," Journal of Business Venturing, Elsevier, vol. 28(3), pages 335-353.

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