Entrepreneurs and firm growth under guilt vs shame cultures

Purpose - This study aims to try and understand under what cultural conditions entrepreneurship will thrive and prosper, whether under shame or guilt cultures. Design/methodology/approach - The authors use basic game theory to model the conditions under which entrepreneurship will thrive. The authors anticipate that guilt cultures allow for the development of a rules-based culture that allows for the development of impersonal exchange, whereas shame cultures, which are relationship-oriented, focus on strong ties and hence lack the means to expand firms from small and medium family/clan-based businesses. Findings - Empirical results are completed to see whether guilt-dominating cultures are more conducive to having larger firms and whether guilt-dominating cultures have less informality. The authors find support for the latter but lack the right data to test the former. Originality/value - The authors use a new measure of culture to see how it impacts entrepreneurship.