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Determinants of entrepreneurial engagement levels in Europe and the US

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  • Isabel Grilo
  • Roy Thurik

Abstract

The process of the entrepreneurial decision is decomposed in seven engagement levels ranging from “never thought about starting a business†to “gave up†, “thinking about it†, “taking steps for starting up†, “having a young business†, “having an older business†and “no longer being an entrepreneur†. 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.

Suggested Citation

  • Isabel Grilo & Roy Thurik, 2007. "Determinants of entrepreneurial engagement levels in Europe and the US," Papers on Entrepreneurship, Growth and Public Policy 2007-02, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  • Handle: RePEc:esi:egpdis:2007-02
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    More about this item

    Keywords

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

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • 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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