Varieties of entrepreneurship: institutional drivers across entrepreneurial activity and country

Abstract

This paper adapts the approach introduced in the literature on disparate varieties of capitalism by proposing that different varieties of entrepreneurship exist. We make the case for the existence of disparate varieties of entrepreneurship by exploring and analyzing three distinct varieties of entrepreneurship that are prevalent but typically analyzed separately in the entrepreneurship literature: new firm start-up, self-employment, and early stage entrepreneurial activity. Using 5 years of data from 44 countries, we highlight the variation in both the conceptualization and the measurement of entrepreneurship across time and geographic context. Our results suggest that institutional factors influence the disparate varieties of entrepreneurship differently: property rights, freedom from corruption, and fewer start-up procedures are significantly positively related to nascent/new firm ownership. Property rights protection is significantly positively related to new firm startup; tax and regulatory burden have significant positive impacts on self-employment but significantly negatively related to new firm start-up. Our findings suggest that the disparate varieties of entrepreneurship are not at all substitutes and are related in very different ways to institutional factors.

Entrepreneurial Activity in the EU: An Empirical Evaluation of Its Determinants

“…The level of entrepreneurial activity differs greatly from one country to another, and within the same country from time to time, and is influenced by several types of factors such as economic, institutional, technological and cultural factors [7,[9][10][11][14][15][16][17][18]. According to Arin et al [19], the aggregate level of entrepreneurial activity in a country is the result of a multiple interaction between human capital, the level of economic development and institutions.…”

The role of entrepreneurship in transforming efficiency economies into innovation-based economies

“…The causes are too numerous to mention all. Institutional barriers (Hashi & Krasniqi 2011), a preference for waged employment because of the higher opportunity cost of starting one's own business (Koellinger & Thurik 2012), an unfavourable institutional framework (Ahlstrom & Ding 2014), the lack of a welfare system that supports entrepreneurs (Chowdhury et al 2015) and institutional instability (Ahlstrom & Bruton 2010) are some of the factors that appear frequently.…”

“…Moreover, it is the government's responsibility to develop supportive institutions that encourage a competitive business environment by reducing the burden imposed by formal institutions (Krasniqi & Desai 2016), improving the social image of entrepreneurs (Barazandeh et al 2015), ensuring corruption-resistant structures, strong property rights and reducing tax and administrative burdens (Chowdhury et al 2015).…”

“…We presume that the difference is rooted in factors inherent to the economic structure, institutional arrangements that are hostile for the growth of entrepreneurial attempts (Ahlstrom & Bruton 2010), an immature entrepreneurship culture (Lee & Peterson 2000), the proliferation of marginal entrepreneurs (Stel et al 2005) and an underdeveloped welfare system for supporting entrepreneurs (Chowdhury et al 2015). Generally speaking, the overall economic, entrepreneurial and societal environment is crippling entrepreneurs in efficiency economies, thereby preventing them from contributing much to the economic development there.…”

“…Entrepreneurship has attracted substantial interest from different parties and is regarded as an engine of economic growth (Albulescu & Tămăşilă 2016;Chowdhury, Terjesen & Audretsch 2015). It sets out a robust platform for economic development through triggering innovation, job creation, productivity, and economic and social growth (Driga, Lafuente & Vaillant 2009;Johnson, Freeman & Staudenmaier 2015;Thornton, Ribeiro-Soriano & Urbano 2011;Wennekers et al 2010).…”