Understanding the role of culture and economic conditions in entrepreneurship

Abstract

This chapter focuses on the joint influence that cultural values (relatively stable informal institutions) and the (more rapidly changing) economic conditions play in explaining the total entrepreneurial activity (TEA) in countries with different levels of development. Data for 55 countries coming from the Global Entrepreneurship Monitor (GEM) and the Schwartz Value Survey (Individualism and collectivism. Theory, method, and applications, Thousand Oaks, CA, 85–119; Comparative Sociology 5:137–182, 2006) are analyzed. General results indicate that the income level is negatively related to entrepreneurship, while the relation is positive for the income growth. Regarding culture, the results show that only in higher income countries, Autonomy values boost entrepreneurial activity. Additionally, higher entrepreneurship is found in countries where Egalitarianism predominates, and the effect becomes stronger as income level rises.