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Culture and Entrepreneurship in the United Arab Emirates

Author

Listed:
  • François Facchini

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Louis Jaeck

    (UAEU - College of Business and Economics, Accounting Department (United Arab Emirates University))

  • Chafik Bouhaddioui

    (UAEU - United Arab Emirates University)

Abstract

It is well known that entrepreneurship plays a key role in economic development; however, its cultural underpinnings remain a marginal field of study. This paper is an attempt to fill this gap. The development trend of the oil-rich United Arab Emirates ("UAE") is at the heart of debates surrounding the effects of culture on economic choices and outcomes. In order to move away from an oil-based economy and provide private sector jobs for its growing number of nationals, the UAE has promoted and implemented diversification strategies over the last 20 years. Yet, less than 2% of the private sector workforce is composed of UAE nationals. The latter prefer working in the public sector because of better salary and working conditions. This paper seeks to explain the cultural foundations of the lack of entrepreneurship among UAE nationals. It conducts a survey among students from United Arab Emirates University and tests the determinants of their entrepreneurial intentions. It shows that the students' culture is holistic and rather hostile to entrepreneurship. Such disinterest is stronger because of fear of stigmatization associated with business failure and because of social prestige associated with public sector jobs. Our results not only confirm the cultural specificity of Rentier States but also invite the launching of educational programs aimed at modifying students' beliefs over entrepreneurship. Such cultural change seems inevitable in the context of a transition from an oil-based to a knowledge-based economy.

Suggested Citation

  • François Facchini & Louis Jaeck & Chafik Bouhaddioui, 2021. "Culture and Entrepreneurship in the United Arab Emirates," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-02732888, HAL.
    • Handle: RePEc:hal:cesptp:hal-02732888
    DOI: 10.1007/s13132-020-00663-z
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