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Institutions and Entrepreneurship: Evidence from GEM-based Research

Institutions and Entrepreneurship: Evidence from GEM-based Research. II Workshop on Entrepreneurship Statistics Huelva, 17-18 November 2008 Jolanda Hessels EIM & Erasmus School of Economics André van Stel EIM & University of Amsterdam. This presentation.

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Institutions and Entrepreneurship: Evidence from GEM-based Research

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  1. Institutions and Entrepreneurship:Evidence from GEM-based Research II Workshop on Entrepreneurship Statistics Huelva, 17-18 November 2008 Jolanda Hessels EIM & Erasmus School of Economics André van Stel EIM & University of Amsterdam

  2. This presentation • Jolanda: background and some examples of GEM-based empirical findings; • André: in-depth GEM-based empirical example.

  3. Introduction • Institutions as a potential determinant of entrepreneurship; • Empirical testing: comparative data across countries/regions; • Global Entrepreneurship Monitor (GEM); • October 2008: GEM special issue Small Business Economics on entrepreneurship, economic development and institutions.

  4. Institutions • Definition: “a set of rules, formal or informal, that actors generally follow, whether for normative, cognitive or material reasons” (North 1990: 3). • Institutions: • enable or constrain economic behavior (North 1990) and economic transactions (Williamson, 1998); • may influence allocation of entrepreneurship across productive/unproductive activities (Baumol 1990).

  5. Institutions • Types of institutions, e.g.: • Regulatory framework; • Educational institutions; • Capital market institutions; • Labor market institutions; • Welfare state institutions; • Other businesses. • Subjective/objective measures; • General/entrepreneurship-specific.

  6. Institutions • Sources for institutional indicators: • E.g. GCR, WCY, World Bank Doing Business Indicators; • GEM expert questionnaire: • assessment of country’s institutional context with respect to entrepreneurship; • covers various dimensions of a country’s institutional environment for entrepreneurship.

  7. Relation institutions - entrepreneurship • Several indicators of entrepreneurship, e.g.: • Stock/flow; • Entrepreneurial process; • Entrepreneurial motivations; • Entrepreneurial aspirations; • Entrepreneurial outcomes. • GEM: possible to assess impact on flow, process, motivations and aspirations; • Relevant to consider level of economic development (Acs, Desai and Hessels, 2008).

  8. Relation institutions - entrepreneurship • Considerations when conducting empirical research: • Direct and indirect effects; • Moderating influences; • Correlations between institutional indicators; • Entrepreneurship may also shape institutional envirionment.

  9. Evidence GEM-based research • Institutions matter; • Institutional environments affect: • supply of e-ship (Levie and Autio, 2008; Hessels, van Stel, Brouwer and Wennekers, 2008; van Stel, Storey and Thurik, 2007); • supply of ambitious e-ship (Bowen and De Clercq, 2008; Levie and Autio, 2008; Hessels, van Gelderen and Thurik, 2008). • Support for: • direct effects (Bowen and De Clercq, 2008; Hessels, van Stel, Brouwer and Wennekers, 2008; van Stel, Storey and Thurik, 2007); • indirect effects (Levie and Autio, 2008); • moderating effects (Autio and Acs, 2008). • Impact may differ along level of economic development (e.g. Levie and Autio, 2008; De Clercq, Hessels and van Stel, 2008).

  10. Examples GEM-based research • Examples of empirical findings: • Post-secondary e-ship education/training relates positively to supply of e-ship and high growth e-ship through opportunity perception in high-income countries (Levie and Autio, 2008) • Financial and educational activities targeted at e-ship relate positively to high growth e-ship; level of corruption negatively (Bowen and De Clercq, 2008); • Taxation and IPR protection moderate relationship between individual’s education and household income with growth aspirations (Autio and Acs, 2008); • Social security negatively relates to supply of e-ship (Wennekers, van Stel, Thurik and Reynolds, 2005; Hessels, van Stel, Brouwer and Wennekers, 2007) and aspiring e-ship (Hessels, van Gelderen and Thurik, 2008); • Outward FDI and international trade positively relate to export-oriented e-ship in high-income countries (De Clercq, Hessels and van Stel, 2008).

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