http://repub.eur.nl/res/aut/556/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/13897/ 2008-03-01T00:00:00Z The online version of the original article can be found under doi: 10.1007/s11187-005-1994-8 http://repub.eur.nl/res/pub/15792/ 2007-05-01T00:00:00Z :This paper revisits the two-equation model of Carree, van Stel, Thurik and Wennekers (2002) where deviations from the 'equilibrium' rate of business ownership play a central role in determining both the growth of business ownership and that of economic development. Two extensions of the original set-up are addressed: using longer time series of averaged data of 23 OECD countries (up to 2004) we can discriminate between different functional forms of the 'equilibrium' rate and we allow for different penalties for being above or under the 'equilibrium' rate. The additional data do not provide evidence of a superior statistical fit of a U-shaped 'equilibrium' relationship when compared to an L-shaped one. There appears to be a growth penalty for having too few business owners but not for having too many. http://repub.eur.nl/res/pub/15777/ 2007-04-01T00:00:00Z Persistent differences in the level of business ownership across countries have attracted the attention of scientific as well as political debate. Cultural as well as economic influences are assumed to play a role. This paper deals with the influence of cultural attitudes towards uncertainty on the rate of business ownership across 21 OECD countries. First, the concepts of uncertainty and risk are elaborated, as well as their relevance for entrepreneurship. An occupational choice model is introduced to underpin our reasoning at the macro-level. Second, regression analysis using pooled macro data for 1976, 1990 and 2004 and controlling for several economic variables, yields evidence that uncertainty avoidance is positively correlated with the prevalence of business ownership. According to our model, a restrictive climate of large organizations in high uncertainty avoidance countries pushes individuals striving for autonomy towards self-employment. Regressions for these 3 years separately show that in 2004, this positive correlation is no longer found, indicating that a compensating pull of entrepreneurship in countries with low uncertainty avoidance may have gained momentum in recent years. Third, an interaction term between uncertainty avoidance and GDP per capita in the pooled panel regressions shows that the historical negative relationship between GDP per capita and the level of business ownership is substantially weaker for countries with lower uncertainty avoidance. This suggests that rising opportunity costs of self-employment play a less important role in this cultural environment, or are being compensated by increasing entrepreneurial opportunities. http://repub.eur.nl/res/pub/8746/ 2007-02-10T00:00:00Z This paper revisits the two-equation model of Carree, van Stel, Thurik and Wennekers (2002) where deviations from the ‘equilibrium’ rate of business ownership play a central role determining both the growth of business ownership and that of economic development. Two extensions of the original setup are addressed: using longer time series of averaged data of 23 OECD countries (up to 2004) we can discriminate between different functional forms of the ‘equilibrium’ rate and we allow for different penalties for being above or under the ‘equilibrium’ rate. The additional data do not provide evidence of a superior statistical fit of a U-shaped ‘equilibrium’ relationship when compared to an L-shaped one. There appears to be a growth penalty for having too few business owners but not so for having too many. http://repub.eur.nl/res/pub/8125/ 2006-11-28T00:00:00Z Persistent differences in the level of business ownership across countries have attracted the attention of scientific as well as political debate. Cultural as well as economic influences are assumed to play a role. This paper deals with the influence of cultural attitudes towards uncertainty on the rate of business ownership across 21 OECD countries. First, the concepts of uncertainty and risk are elaborated, as well as their relevance for entrepreneurship. An occupational choice model is introduced to underpin our reasoning at the macro-level. Second, regression analysis using pooled macro data for 1976, 1990 and 2004 and controlling for several economic variables, yields evidence that uncertainty avoidance is positively correlated with the prevalence of business ownership. According to our model, a restrictive climate of large organizations in high uncertainty avoidance countries pushes individuals striving for autonomy towards self-employment. Regressions for these three years separately show that in 2004, this positive correlation is no longer found, indicating that a compensating pull of entrepreneurship in countries with low uncertainty avoidance may have gained momentum in recent years. Third, an interaction term between uncertainty avoidance and GDP per capita in the pooled panel regressions shows that the historical negative relationship between GDP per capita and the level of business ownership is substantially weaker for countries with lower uncertainty avoidance. This suggests that rising opportunity costs of self-employment play a less important role in this cultural environment, or are being compensated by increasing entrepreneurial opportunities. http://repub.eur.nl/res/pub/7982/ 2006-09-15T00:00:00Z A. (Sander) R.M. Wennekers (1947) has been active as a professional economist for more than 30 years. Since 1988 he holds a management position with EIM at Zoetermeer (the Netherlands), where he is in charge of the research program on SMEs and entrepreneurship. Sander is Ameritech Research Scholar at the Institute for Development Strategies of Indiana University, he participates in many professional organizations and he is a member of the Research Committee of the Global Entrepreneurship Monitor. His work at the crossroads of entrepreneurship and macroeconomics has been published in several books and academic journals. http://repub.eur.nl/res/pub/9857/ 2005-12-01T00:00:00Z Based upon two strands of literature, this paper hypothesizes a U-shaped relationship between a country’s rate of entrepreneurial dynamics and its level of economic development. This would imply a different scope for entrepreneurship policy across subsequent stages of development. Regressing GEM’s 2002 data for nascent entrepreneurship in 36 countries on the level of economic development as measured either by per capita income or by an index for innovative capacity, we find support for a U-shaped relationship. Testing our results against several control variables, evidence is again found for this relationship with economic development, in addition to significant effects of the business ownership rate (+), social security expenditure (-), aggregate taxes (+) and population growth (+). The results suggest that a ‘natural rate’ of nascent entrepreneurship is to some extent governed by ‘laws’ related to the level of economic development. For the most advanced nations, improving incentive structures for business start-ups and promoting the commercial exploitation of scientific findings offer the most promising approach for public policy. Developing nations, however, may be better off pursuing the exploitation of scale economies, fostering foreign direct investment and promoting management education. http://repub.eur.nl/res/pub/9714/ 2005-01-01T00:00:00Z This exploratory study focuses on the conversion from nascent to actual entrepreneurship and the role of entry barriers in this process. Using data for a sample of countries participating in the Global Entrepreneurship Monitor between 2002 and 2004, we estimate a twoequation model explaining the nascent entrepreneurship rate and the young business entrepreneurship rate, while taking into account the interrelationship between the two variables (i.e. the conversion). Furthermore various determinants of entrepreneurship reflecting the demand and supply side of entrepreneurship as well as government intervention are incorporated in the model. We find evidence for a strong conversion effect from nascent to actual entrepreneurship. We also find positive effects on entrepreneurial activity rates of labour flexibility and tertiary enrollment and a negative effect of social security expenditure. Concerning the effect of entry regulations we find mixed results. Using one set of entry regulation measures we find no effects whereas using data from a second source we find a weak negative effect of more burdensome entry regulations on the rate of entrepreneurship. http://repub.eur.nl/res/pub/15822/ 2004-09-01T00:00:00Z This article deals with explaining the sizable differences in the rate of self-employment (business ownership) across 15 European countries in the period 1978–2000, within a framework of occupational choice, focusing on the influence of dissatisfaction and of per capita income. Using two different measures of dissatisfaction, in addition to the level of economic development and controlling for several other variables, we find that, in addition to a negative and significant impact of per capita income, dissatisfaction at the level of societies has a positive and significant influence on self-employment levels. Both dissatisfaction with life and dissatisfaction with the way democracy works are found to influence self-employment. It is concluded that these are proxies for job dissatisfaction and at the same time represent other negative "displacements" known to promote self-employment. The findings indirectly point at the potential importance of push factors within the incentive structures of modern economies http://repub.eur.nl/res/pub/9723/ 2004-05-19T00:00:00Z This paper deals with explaining the sizable differences in the rate of self-employment (business ownership) across 15 European countries in the period 1978-2000, within a framework of occupational choice, focusing on the influence of dissatisfaction and of per capita income. Using two different measures of dissatisfaction, in addition to the level of economic development and controlling for several other variables, we find that, in addition to a negative and significant impact of per capita income, dissatisfaction at the level of societies has a positive and significant influence on self-employment levels. Both dissatisfaction with life and dissatisfaction with the way democracy works are found to influence self-employment. It is concluded that these are proxies for job dissatisfaction and at the same time represent other negative "displacements" known to promote self-employment. The findings indirectly point at the potential importance of push factors within the incentive structures of modern economies. http://repub.eur.nl/res/pub/15817/ 2004-01-01T00:00:00Z Looks at the relationship between small business and entrepreneurship and also the differences between the two. Stresses that both are important separately and, in addition, notes where they overlap. Posits that in the early part of the last century small businesses were both vehicles for entrepreneurship and sources of employment and income but, although still important in the post-war years, large firms made great inroads in the 1960s and 1970s. Concludes that government’s central role in entrepreneurialism for the economy is, by its very nature, enabling. Furthermore, entrepreneurship is acknowledged as a driver for economic growth, competitiveness and job creation. http://repub.eur.nl/res/pub/9716/ 2004-01-01T00:00:00Z This paper aims at explaining cross-country variation in nascent entrepreneurship. Regression analysis is applied using various explanatory variables derived from three different approaches. We make use of the Global Entrepreneurship Monitor database, including nascent entrepreneurship rates for 36 countries in 2002 as well as variables from standardized national statistics. The first approach relates the level of entrepreneurship of a country to its level of economic development. We find evidence for a U-shaped relationship. The second approach deals with a regime switch where the innovative advantage moves from large, established enterprises to small and new firms, because new technologies have reduced the importance of scale economies in many sectors. The third approach assumes that nascent entrepreneurship partly depends upon various non-economic conditions in the domains technology, demography, culture and institutions, influencing opportunities, resources, skills and preferences. Several indicators of these aggregate conditions are found to influence nascent entrepreneurship. A full, eclectic model combining the three approaches includes a U-shaped relationship with per capita income as well as with Porter's innovative capacity index in addition to effects of the total business ownership rate (+), social security expenditure (-), the aggregate tax rate (+) and population growth (+). In the model a '(former) centralized command economies' dummy also plays a role (-). Finally, the paper investigates whether determinants of nascent entrepreneurship differ for opportunity-based and necessity- based forms of entrepreneurial activity. A U-shaped relationship with per capita income as well as with the innovative capacity index is only found for opportunity-based entrepreneurial activity. For economically advanced nations striving to promote entrepreneurship, the results suggest that improving incentive structures for entrepreneurship and promoting the entrepreneurial exploitation of scientific findings offer a promising approach for public policy. http://repub.eur.nl/res/pub/1034/ 2003-11-13T00:00:00Z This paper deals with differences in the rate of self-employment (business ownership) in 15 European countries for the period 1978-2000, focusing on the influence of dissatisfaction and using the framework of occupational choice. Using two different measures of dissatisfaction, in addition to the level of economic development, the unemployment rate and income differentials, we find that dissatisfaction at the level of societies is the most significant factor for explaining differences in self-employment levels. Dissatisfaction with life and with the way democracy works are both found to be positively related to self-employment. It is concluded that these are proxies for job dissatisfaction and at the same time represent other negative ‘displacements’ known to promote self-employment. http://repub.eur.nl/res/pub/9819/ 2003-01-01T00:00:00Z This paper aims at explaining cross-country variation in nascent entrepreneurship. Regression analysis is applied using various explanatory variables derived from three different approaches. We make use of the Global Entrepreneurship Monitor database, including nascent entrepreneurship rates for 36 countries in 2002 as well as variables from standardized national statistics. The first approach relates the level of entrepreneurship of a country to its level of economic development. We find evidence for a U-shaped relationship. The second approach deals with a regime switch where the innovative advantage moves from large, established enterprises to small and new firms, because new technologies have reduced the importance of scale economies in many sectors. The third approach assumes that nascent entrepreneurship depends upon aggregate conditions such as technology, demography, culture and institutions, influencing opportunities, resources, skills and preferences. Several indicators of these aggregate conditions are found to correlate with nascent entrepreneurship. A full model combining the three approaches includes a U-shaped relationship with per capita income as well as with Porter’s innovative capacity index in addition to effects of social security expenditure (-) and the total business ownership rate (+). Finally, a (former) communist-country dummy plays an important role. http://repub.eur.nl/res/pub/15875/ 2002-11-01T00:00:00Z In the present paper we address the relationship between business ownership and economic development. We will focus upon three issues. First, how is the equilibrium rate of business ownership related to the stage of economic development? Second, what is the speed of convergence towards the equilibrium rate when the rate of business ownership is out-of-equilibrium? Third, to what extent does deviating from the equilibrium rate of business ownership hamper economic growth? Hypotheses concerning all three issues are formulated in the framework of a new two-equation model. We find confirmation for the hypothesized economic growth penalty on deviations from the equilibrium rate of business ownership using a data panel of 23 OECD countries. An important policy implication of our exercises is that low barriers to entry and exit of businesses are necessary conditions for the equilibrium seeking mechanisms that are vital for a sound economic development. http://repub.eur.nl/res/pub/15871/ 2002-01-01T00:00:00Z The present paper provides a theoretical framework of the relationship between rate of entrepreneurship and n ational economic performance. The first part deals with some aspects of the recent economics literature on the relation between entrepreneurship and small business, on the one hand, and economic growth, on the other. In particular, it gives a summary of some work of the EIM/CASBEC research group in the Netherlands. In the second part a framework is presented linking entrepreneurship and growth at different levels of aggregation. The last part of the paper illustrates the framework with some historical case studies. The present paper supplements Wennekers, Uhlaner and Thurik (2002) which is concerned with the causes of the rate of entrepreneurship. http://repub.eur.nl/res/pub/15876/ 2002-01-01T00:00:00Z The rate of entrepreneurship, a multidimensional concept including both the percentage of existing business owners in the labor force as well as the start-up rate of new enterprises, varies substantially across countries and over periods of time. Data for several modern Western nations including the United States, the United Kingdom and the Netherlands suggest a U-shaped recovery in rate of entrepreneurship (as measured by business ownership) toward the end of the 20th century. However, the timing, pattern and extent of this recovery vary substantially across nations. The reasons for this large variation in rate of entrepreneurship across time and by country are by no means straightforward. This paper provides a framework explaining the causes of the variation in rate of entrepreneurship across countries. The last part of the paper illustrates the framework with two historical case studies: the Dutch Golden Age of the 17th century and Britain’s First Industrial Revolution (1760-1830). The approach taken is eclectic, integrating various research streams in the social sciences. Policy implications are also proposed. http://repub.eur.nl/res/pub/125/ 2001-11-01T00:00:00Z The aim of the present short paper is to show that since the 1970s the world has changed considerably, and that this change has had consequences for the current policy debate on the determinants of economic growth. Our paper deals with some aspects of the recent scientific literature on the relation between entrepreneurship and small business, on the one hand, and economic growth, on the other. In particular, it gives a summary of some work of the EIM/CASBEC research group in the Netherlands. It refers to scientific analyses showing that countries that are lagging behind in the process of restructuring will pay a penalty in terms of forgone growth. It also pays attention to the Global Entrepreneurship Monitor (GEM), a new and large multinational project focusing on the collection and analysis of internationally comparable data on the rate of entrepreneurial activity. http://repub.eur.nl/res/pub/6873/ 2001-03-14T00:00:00Z The level of entrepreneurship differs considerably across countries and periods. Both the causes and consequences of entrepreneurship are a matter of extensive scientific debate as well as of great policy importance. A high level of entrepreneurial activity is assumed and shown to contribute to innovative activities, competition, economic growth and job creation. The present paper deals with the determinants of entrepreneurship. An eclectic theory of entrepreneurship is introduced. This eclectic theory provides an integrated framework, drawing on disparate strands of literature, to create a better understanding of the different role that entrepreneurship plays in different countries and time periods. This framework is designed to guide future empirical research in this area and to provide insights for policymakers striving to promote entrepreneurship. http://repub.eur.nl/res/pub/7701/ 2000-02-10T00:00:00Z In the present paper we address the relationship between the extent of business ownership (self-employment) and economic development. We will focus upon three issues. First, how is the equilibrium rate of business ownership related to the stage of economic development? Second, what is the speed of convergence towards the equilibrium rate when the rate of business ownership is out-of-equilibrium? Third, to what extent does deviating from the equilibrium rate of business ownership lead to less economic growth? Hypotheses concerning all three issues are formulated setting up a new two-equation model. We find confirmation for the hypothesised effects using a data panel of 23 OECD countries. An important policy implication of our exercises is that low barriers to entry and exit of self-employed/businesses are necessary conditions for the equilibrium seeking mechanisms that are vital for a sound economic development. http://repub.eur.nl/res/pub/9908/ 2000-01-01T00:00:00Z In the present paper we address the relationship between the extent of business ownership and economic development. We will focus upon three issues. First, how is the equilibrium rate of business ownership related to the stage of economic development? Second, what is the speed of convergence towards the equilibrium rate when the rate of business ownership is out-of-equilibrium? Third, to what extent does deviating from the equilibrium rate of business ownership lead to a penalty of less economic growth? Hypotheses concerning all three issues are formulated setting up a new two-equation model. A basic aspect of the model is a U-shaped relation between the equilibrium rate of business ownership and the stage of economic development. The existence of this relation as well as that of a penalty for out-ofequilibrium situations is confirmed using a data panel of 23 OECD countries. An important policy implication of our exercises is that low barriers to entry and exit of businesses are necessary conditions for the equilibrium seeking mechanisms that are vital for a sound economic development. http://repub.eur.nl/res/pub/15892/ 1999-08-01T00:00:00Z In the 1980s stagflation and high unemployment caused a renewed interest in supply side economics and in factors determining economic growth. Simultaneously, the 1980s and 1990s have seen a reevaluation of the role of small firms and a renewed attention for entrepreneurship. The goal of this survey is to synthesize disparate strands of literature to link entrepreneurship to economic growth. This will be done by investigating the relationship between entrepreneurship and economic growth using elements of various fields: historical views on entrepreneurship, macro-economic growth theory, industrial economics (Porter''s competitive advantage of nations), evolutionary economics, history of economic growth (rise and fall of nations) and the management literature on large corporate organizations. Understanding the role of entrepreneurship in the process of economic growth requires the decomposition of the concept of entrepreneurship. A first part of our synthesis is to contribute to the understanding of the dimensions involved, while paying attention to the level of analysis (individual, firm and aggregate level). A second part is to gain insight in the causal links between these entrepreneurial dimensions and economic growth. A third part is to make suggestions for future empirical research into the relationship between (dimensions of) entrepreneurship and economic growth.