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Designing Composite Entrepreneurship Indicators: An Application Using Consensus PCA

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Author Info
Avanzini, Diego B.
Abstract

Existing indicators of entrepreneurial activity (such as the Global Entrepreneurship Monitor, Entrepreneurship Barometer, FORA.s Entrepreneurship Index, OECD and Economic Commission.s sets of indicators, among others) and several variables that have been considered good proxies for entrepreneurship during the last decades seem to be unsuitable to capture the complex relationship among economic, social, and demographic factors driving entrepreneurial activity.In order to suggest a consistent methodology for measuring entrepreneurship, we review some of the most well-known theoretical dimensions of entrepreneurship and a selection of associated indicators is proposed. Indicators and measures are grouped under theoretical categories and a set of entrepreneurship indicators is constructed using multivariate statistical analysis (Consensus PCA based on NIPALS, with an extension of Probability PCA for dealing with missing values) for a panel of developed and developing countries.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number UNU-WIDER Research Paper RP2009/41.

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Length: 39
Date of creation: 2009
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Handle: RePEc:unu:wpaper:rp2009-41

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Keywords: entrepreneurship; index; principal components analysis;

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  1. David B. Audretsch & Roy Thurik, 2001. "Linking Entrepreneurship to Growth," OECD Science, Technology and Industry Working Papers 2001/2, OECD, Directorate for Science, Technology and Industry. [Downloadable!]
  2. Michael Freudenberg, 2003. "Composite Indicators of Country Performance: A Critical Assessment," OECD Science, Technology and Industry Working Papers 2003/16, OECD, Directorate for Science, Technology and Industry. [Downloadable!]
  3. Shin-ichi Fukuda & Takashi Onodera, 2001. "A New Composite Index of Coincident Economic Indicators in Japan: How can we improve the forecast performance? ," CIRJE F-Series CIRJE-F-101, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  4. Louis Guttman, 1954. "Some necessary conditions for common-factor analysis," Psychometrika, Springer, vol. 19(2), pages 149-161, June. [Downloadable!] (restricted)
  5. Nadim Ahmad & Anders Hoffman, 2008. "A Framework for Addressing and Measuring Entrepreneurship," OECD Statistics Working Papers 2008/2, OECD, Statistics Directorate. [Downloadable!]
  6. Nadim Ahmad & Richard G. Seymour, 2008. "Defining Entrepreneurial Activity: Definitions Supporting Frameworks for Data Collection," OECD Statistics Working Papers 2008/1, OECD, Statistics Directorate. [Downloadable!]
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