A theoretical grounding and test of the GEM model

Abstract

The Global Entrepreneurship Monitor model combines insights on the allocation of effort into entrepreneurship at the national (adult working age population) level with literature in the Austrian tradition. The model suggests that the relationship between national-level new business activity and the institutional environment, or Entrepreneurial Framework Conditions, is mediated by opportunity perception and the perception of start-up skills in the population. We provide a theory-grounded examination of this model and test the effect of one EFC, education and training for entrepreneurship, on the allocation of effort into new business activity. We find that in high-income countries, opportunity perception mediates fully the relationship between the level of post-secondary entrepreneurship education and training in a country and its rate of new business activity, including high-growth expectation new business activity. The mediating effect of skills perception is weaker. This result accords with the Kirznerian concept of alertness to opportunity stimulating action.

New Zealand’s perfect storm of entrepreneurship and economic development

“…The model developed by GEM (Reynolds et al 1999(Reynolds et al , 2000(Reynolds et al , 2001(Reynolds et al , 2002(Reynolds et al , 2003Acs et al 2005;Minniti et al 2006;Arenius and Ehrstedt 2008;Levie and Autio 2008;Bosma et al 2009) shows that total early-stage entrepreneurial activity (TEEA) 1 is particularly shaped by a distinct set of factors called ''entrepreneurial framework conditions'' (EFCs). The EFCs serve as the backbone to entrepreneurial activity but there are many noneconomic entrepreneurial framework conditions (such as government policies and programs, education and training, technology, demography, culture, and social institutions) that influence the rate of start-up entrepreneurship.…”

Entrepreneurship, economic development and institutions

“…For both measures, the research focus is on entrepreneurial activity in which the individual involved has a direct, but not necessarily full ownership interest in the business. The GEM model serves as a vehicle to interpret both the data collection process and provide a framework for theory and policy (Levie and Autio 2008).…”

The influence of socio-cultural environments on the performance of nascent entrepreneurs: Community culture, motivation, self-efficacy and start-up success

“…Our understanding of individual factors enabling and hindering entrepreneurship has significantly increased, however, it is only relatively recently that researchers have addressed the question of how embedded entrepreneurial behavior is in national institutions. In particular, crossnational research has yielded valuable insights into formal institutions influencing entrepreneurial behavior (e.g., Aidis, Estrin and Mickiewicz 2010;Bowen and DeClercq, 2008;Djankov, La Porta, Lopez-de-Silanes and Shleifer 2002;Levie and Autio, 2008;Van Stel, Storey and Thurik, 2007). By contrast, little research has addressed the role of informal institutions, including culture.…”