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Determinants of entrepreneurship in Europe

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  • Isabel Grilo
  • Roy Thurik

Abstract

This paper presents an Eclectic Framework explaining (developments in and determinants of) entrepreneurship incorporating different streams of literature and spanning different disciplines. The Eclectic Framework integrates factors shaping the demand for entrepreneurship on the one hand, with those influencing the supply of entrepreneurs on the other hand. It also creates insight into the role of public policy identifying the channels through which the demand or the supply of entrepreneurship can be shifted. In its empirical part the present paper estimates a multinomial logit using survey data from the 15 EU member states, Norway, Iceland, Liechtenstein and the US to establish the effect of demographic and other variables on various entrepreneurial engagement levels. Other than demographic variables, the set of explanatory variables used includes the perception by respondents of administrative complexities, of availability of financial support, a rough measure of risk tolerance, the respondents' preference for self -employment and country specific effects. The most striking result is that the perception of lack of financial support has no discriminative effect across the various levels of entrepreneurial engagement.

Suggested Citation

  • Isabel Grilo & Roy Thurik, 2004. "Determinants of entrepreneurship in Europe," Papers on Entrepreneurship, Growth and Public Policy 2004-30, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    • Handle: RePEc:esi:egpdis:2004-30
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    More about this item

    Keywords

    entrepreneurship; determinants; nascent entrepreneurship; multinomial logit; barriers to entry;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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