Understanding the Drivers of an ‘Entrepreneurial’ Economy : Lessons from Japan and the Netherlands
AbstractGlobalization and an increasing importance of knowledge in the production process cause many developed countries to move from a more ‘managed’ to a more ‘entrepreneurial’ economy in recent decades. In the former type of economy, large and incumbent firms play a dominant role, exploiting economies of scale in a relatively certain economic environment. In the latter type, small and new firms play an increasingly important role, introducing new products and services in highly uncertain economic environments while quickly adapting to rapidly changing consumer preferences. The speed of adjustment in this transition process from a managed to an entrepreneurial economy varies by country. In this paper we investigate the differences between a more ‘managed’ economy, Japan, characterized by relatively low levels of entrepreneurial activity, and a more ‘entrepreneurial’ economy, the Netherlands. Building on earlier work by Hartog et al. (2010), who explain cross-country differences in three measures of entrepreneurial activity using five broad groups of explanatory variables, we apply a decomposition analysis to better understand the differences in entrepreneurial activity between Japan and the Netherlands. We find that, in spite of higher levels of entrepreneurial activity in the Netherlands, the institutional framework in the Netherlands is considerably less favourable to entrepreneurship, compared to Japan. On the other hand, cultural differences between the Netherlands and Japan explain a substantial part of the difference in entrepreneurship rates between the two countries.
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Bibliographic InfoPaper provided by Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University in its series CCES Discussion Paper Series with number 36.
Length: 44 p.
Date of creation: Sep 2010
Date of revision:
entrepreneurship; cross-country comparison; Japan; the Netherlands; United States;
Other versions of this item:
- André van Stel & Ingrid Verheul & Hiroyuki Okamuro, 2011. "Understanding the Drivers of an 'Entrepreneurial' Economy: Lessons from Japan and the Netherlands," Scales Research Reports H201102, EIM Business and Policy Research.
- NEP-ALL-2010-10-23 (All new papers)
- NEP-ENT-2010-10-23 (Entrepreneurship)
- NEP-SBM-2010-10-23 (Small Business Management)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andre van Stel, .
"COMPENDIA: Harmonizing business ownership data across countries and over time,"
Papers on Entrepreneurship, Growth and Public Policy
2005-05, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
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- Peter Zwan & Ingrid Verheul & A. Thurik, 2012. "The entrepreneurial ladder, gender, and regional development," Small Business Economics, Springer, vol. 39(3), pages 627-643, October.
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