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Cross-national differences in entrepreneurial activity: role of culture and institutional factors

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  • Ratan J. S. Dheer

    (College of Business, Eastern Michigan University)

Abstract

A review of literature in entrepreneurship and public policy suggests that the level of political freedom, corruption, and education are important antecedents to the rate of entrepreneurial activity in nations. However, empirical analysis of the effect these factors have on entrepreneurial activity across nations remains ambiguous. This study proposes that the cultural context of nations moderates the effect of these factors. Consistent with this argument, it investigates the role of individualism-collectivism in moderating the effect of political freedom, corruption, and education on entrepreneurial activity across nations. Macro-level data on 84 nations is obtained from multiple reliable sources and used to test the hypotheses. Results support the theorized arguments and suggest that individualism positively moderates the effect of political freedom, negatively moderates the effect of corruption, and positively moderates the effect of education, on the rate of entrepreneurial activity across nations.

Suggested Citation

  • Ratan J. S. Dheer, 2017. "Cross-national differences in entrepreneurial activity: role of culture and institutional factors," Small Business Economics, Springer, vol. 48(4), pages 813-842, April.
    • Handle: RePEc:kap:sbusec:v:48:y:2017:i:4:d:10.1007_s11187-016-9816-8
    DOI: 10.1007/s11187-016-9816-8
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    2. Kadri Arrak & Anneli Kaasa & Urmas Varblane, 2020. "Regional Cultural Context as a Determinant of Entrepreneurial Behaviour: The Case of Germany," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 29(1), pages 88-118, March.
    3. Assmann, Daisy & Ehrl, Philipp, 2021. "Individualistic culture and entrepreneurial opportunities," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1248-1268.
    4. Diana Escandon-Barbosa & David Urbano-Pulido & Andrea Hurtado-Ayala, 2019. "Exploring the Relationship between Formal and Informal Institutions, Social Capital, and Entrepreneurial Activity in Developing and Developed Countries," Sustainability, MDPI, vol. 11(2), pages 1-20, January.
    5. Colin Donaldson, 2021. "Culture in the entrepreneurial ecosystem: a conceptual framing," International Entrepreneurship and Management Journal, Springer, vol. 17(1), pages 289-319, March.
    6. Maha Aly & Galal Galal-Edeen, 2021. "Why is Germany less entrepreneurial? A behavioral reasoning perspective," The Journal of Technology Transfer, Springer, vol. 46(5), pages 1376-1416, October.
    7. Rajeev K. Goel & Michael A. Nelson, 2021. "Corrupt encounters of the fairer sex: female entrepreneurs and their corruption perceptions/experience," The Journal of Technology Transfer, Springer, vol. 46(6), pages 1973-1994, December.
    8. Sahasranamam, Sreevas & Nandakumar, M.K., 2020. "Individual capital and social entrepreneurship: Role of formal institutions," Journal of Business Research, Elsevier, vol. 107(C), pages 104-117.
    9. Tatsiana Dziavochka & Elyas Abdulahi Mohamued, 2020. "The Nexus of Chinese OFDI Innovation and Entrepreneurship in Europe: A True Fixed Effect Stochastic Analysis," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(4), pages 399-414, April.
    10. David B. Audretsch & Maksim Belitski & Julia Korosteleva, 2021. "Cultural diversity and knowledge in explaining entrepreneurship in European cities," Small Business Economics, Springer, vol. 56(2), pages 593-611, February.
    11. F. Javier Sanchez-Vidal & Camino Ramon-Llorens, 2021. "Perception of corruption influences entrepreneurship inside established companies," Papers 2105.11829, arXiv.org.
    12. Bogatyreva, Karina & Edelman, Linda F. & Manolova, Tatiana S. & Osiyevskyy, Oleksiy & Shirokova, Galina, 2019. "When do entrepreneurial intentions lead to actions? The role of national culture," Journal of Business Research, Elsevier, vol. 96(C), pages 309-321.
    13. Zoltan Acs & Emma Lappi, 2021. "Entrepreneurship, culture, and the epigenetic revolution: a research note," Small Business Economics, Springer, vol. 56(4), pages 1287-1307, April.
    14. Miao, Chao & Gast, Johanna & Laouiti, Rahma & Nakara, Walid, 2022. "Institutional factors, religiosity, and entrepreneurial activity: A quantitative examination across 85 countries," World Development, Elsevier, vol. 149(C).

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    More about this item

    Keywords

    Entrepreneurial activity; Individualism-collectivism; Political freedom; Corruption; Education; Culture; Formal and informal institutional factors; GEM;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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