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Determinants of entrepreneurial engagement levels in Europe and the US

  • Isabel Grilo
  • Roy Thurik

The process of the entrepreneurial decision is decomposed in seven engagement levels ranging from “never thought about starting a business†to “gave upâ€, “thinking about itâ€, “taking steps for starting upâ€, “having a young businessâ€, “having an older business†and “no longer being an entrepreneurâ€. By using a multinomial logit model we allow the effect of covariates to differ across the various entrepreneurial engagement levels. Data from two Entrepreneurship Flash Eurobarometer surveys (2002 and 2003) con-taining over 20,000 observations of the 15 old EU member states, Norway, Iceland, Liechtenstein and the US are used. Other than demographic variables, the set of explanatory variables used includes the percep-tion by respondents of administrative complexities, of availability of financial support and of risk tolerance, the respondents’ preference for self-employment and country specific effects. Among our results we find that the perception of lack of financial support has no discriminative effect across the various levels of en-trepreneurial engagement while perception of administrative complexities plays a negative role only for high levels of engagement.

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Paper provided by Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group in its series Papers on Entrepreneurship, Growth and Public Policy with number 2007-02.

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Length: 25 pages
Date of creation: Dec 2007
Date of revision:
Handle: RePEc:esi:egpdis:2007-02
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