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Latent and actual entrepreneurship in Europe and the US: some recent developments

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  • Roy Thurik

    ()

  • Isabel Grilo

    ()

Abstract

This paper uses 2004 survey data from the 15 old EU member states and the US to explain country differences in latent and actual entrepreneurship. Other than demographic variables such as gender, age and education, the set of covariates includes the perception by respondents of administrative complexities, of availability of financial support and of risk tolerance as well as country-specific effects. A comparison is made with results using a similar survey in 2000. While a majority of the surveyed population identifies lack of financial support as an obstacle to starting a new business, the role of this variable in both latent and actual entrepreneurship appears to be even more counterintuitive in 2004 than in 2000: it has no impact on actual entrepreneurship and is positively related to latent entrepreneurship. Administrative complexities, also perceived as an obstacle by a large majority of the population, have the expected negative impact both for latent and actual entrepreneurship in both years. Country-specific effects are important both for latent and actual entrepreneurship and the comparison of 2000 and 2004 results suggests that, once all other factors are controlled for, an improvement in actual entrepreneurship in the EU relative to the US has taken place in the last four years. However, in terms of unweighted averages actual entrepreneurship remained about the same. Latent entrepreneurship dropped while this drop seems to have occurred evenly in the US and the EU member states.

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Bibliographic Info

Paper provided by Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group in its series Papers on Entrepreneurship, Growth and Public Policy with number 2005-24.

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Length: 30 pages
Date of creation: Aug 2005
Date of revision:
Handle: RePEc:esi:egpdis:2005-24

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Keywords: entrepreneurship; latent entrepreneurship; nascent entrepreneurship; determinants; Europe;

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References

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  1. Davidsson, Per & Honig, Benson, 2003. "The role of social and human capital among nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(3), pages 301-331, May.
  2. André van Stel & Viktor Stunnenberg, 2004. "Linking Business Ownership and Perceived Administrative Complexity: An Empirical Analysis of 18 OECD Countries," Scales Research Reports N200409, EIM Business and Policy Research.
  3. David G. Blanchflower, 2004. "Self-Employment: More may not be better," NBER Working Papers 10286, National Bureau of Economic Research, Inc.
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  12. André van Stel & Roy Thurik & Ingrid Verheul, 2004. "Explaining female and male entrepreneurship across 29 countries," Scales Research Reports N200403, EIM Business and Policy Research.
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  18. André van Stel & Roy Thurik & Sander Wennekers & David Storey, 2006. "From nascent to actual entrepreneurship: the effect of entry barriers," Scales Research Reports N200508, EIM Business and Policy Research.
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  28. Rees, Hedley & Shah, Anup, 1986. "An Empirical Analysis of Self-employment in the U.K," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 95-108, January.
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