Navigating bureaucracy: How education influences entrepreneurial growth aspirations

This study examines the moderating role of a government’s bureaucratic effectiveness in the relationship between entrepreneurs’ education and their growth aspiration, i.e., their aspirations to grow their businesses. We propose a multilevel framework to capture these influences. Based on this framework, we hypothesized that there would be a positive relationship between education and growth aspirations, and that this positive relationship would be strengthened as a government’s bureaucratic effectiveness increases. We test these hypotheses using multilevel regression on a large sample of hierarchical data. Our findings indicate that entrepreneurs’ growth aspirations increase with their level of education, supporting our first hypothesis. However, contrary to our second hypothesis, we find that higher bureaucratic effectiveness weakens, rather than strengthens, the positive correlation between education and growth aspirations. This counterintuitive finding implies that, in the context of growth aspirations, the value of education becomes more pronounced when bureaucracy is less effective.