http://repub.eur.nl/res/concept/jel-H10/ Recent publications classified by JEL Code H10 en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/15775/ 2010-07-14T00:00:00Z We test a new model where the entrepreneurial decision is described as a process of successive engagement levels, i.e. as an entrepreneurial ladder. Five levels are distinguished using nearly 12 000 observations from the 2004 ‘Flash Eurobarometer survey on Entrepreneurship’ covering the 25 European Union member states and the United States. The most surprising of the many results is that perception of lack of financial support is no obstacle for moving to a higher entrepreneurial engagement level whereas perceived administrative complexity is a significant obstacle. We also show that the effect of age on the probability of moving forward in the entrepreneurial process becomes negative after a certain age implying that if entrepreneurial engagements are not taken early enough in life they may well never be taken. Zwan, P.W. van der Thurik, A.R. Grilo, I. http://repub.eur.nl/res/pub/16518/ 2009-08-01T00:00:00Z We investigate which countries have the highest potential to achieve entrepreneurial progress. This progress is defined using an entrepreneurial ladder with five successive steps: “never thought about starting a business”, “thinking about starting a business”, “taking steps to start a business”, “running a business for less than three years”, and “running a business for more than three years”. We assess the influence of individual-level and country-level variables on progression through these stages. Data are used from the 2007 “Flash Eurobarometer Survey on Entrepreneurship”, covering 27 European countries and the United States. We find that countries display large variation in the ease with which businesses come into existence and survive. In the US many people think about setting up a business whereas Europeans are better at achieving higher levels of engagement. Particularly in Austria, France and Lithuania there appear to be low probabilities to advance in the process. Our analysis suggests that country differences can be explained by the level of economic development and risk tolerance while the administrative and financial climate play a role for some steps. The paper also provides results on the influence of individual-level demographic and obstacle perception variables. Zwan, P.W. van der Verheul, I. Thurik, A.R. Grilo, I. http://repub.eur.nl/res/pub/20568/ 2009-01-01T00:00:00Z Over the last decade the interest in the quality of EU legislative instruments has surged due to serious threats to the effectiveness of the legislation. This contribution makes an inventory of the policies and instruments that have been put into place to improve quality of legislation and assesses their character, orientation and effectiveness. Any appraisal of these policies, so the paper argues, is dependent on a perception of the basic functions attributed to EU legislative instruments and the standards derived from it. The paper concludes that the present policies and instruments for Better lawmaking have the ability to promote regulatory quality, but not necessarily overall legislative quality. Voermans, W. http://repub.eur.nl/res/pub/12981/ 2008-01-01T00:00:00Z It is widely believed that globalization, through increased factor mobility, will exert a downward pressure on tax rates and hence on public expenditures. Recent advances in the new economic geography (NEG) literature have, however, shown that such a ‘race to the bottom’ is not inevitable. Even with perfect factor mobility, a positive tax differential between core and peripheral countries can persist as long as the agglomeration rent, that is associated with being located in the agglomeration, exceeds the tax gap. In these NEG models the relevance of government spending as a determinant of agglomeration is, however, unduly neglected. The focus is on tax rates only and on the stability of core-periphery equilibria. Using a NEG model where the provision of public goods is allowed to influence the location choices of economic agents and starting intially from a spreading instead of a core-periphery equilibrium, we show that governments can affect the spatial equilibrium through their provision of public goods. Our main finding is that the introduction of public goods fosters agglomeration in the sense that it makes the spreading equilibrium unstable. Brakman, S. Garretsen, J.H. Marrewijk, J.G.M. van http://repub.eur.nl/res/pub/8134/ 2006-11-22T00:00:00Z We test a new model where the entrepreneurial decision is described as a process of successive engagement levels, i.e., as an entrepreneurial ladder. Five levels are distinguished using nearly 12,000 observations from the 2004 “Flash Eurobarometer survey on Entrepreneurship” covering the 25 European Union member states and the United States. The most surprising of the many results is that perception of lack of financial support is no obstacle for moving to a higher entrepreneurial engagement level whereas perceived administrative complexity is a significant obstacle. We also show that the effect of age on the probability of moving forward in the entrepreneurial process becomes negative after a certain age implying that if entrepreneurial engagements are not taken early enough in life they may well never be taken. Zwan, P.W. van der Thurik, A.R. Grilo, I. http://repub.eur.nl/res/pub/15794/ 2006-03-01T00:00:00Z Using Global Entrepreneurship Monitor data for 29 countries this study investigates the (differential) impact of several factors on female and male entrepreneurship at the country level. These factors are derived from three streams of literature, including that on entrepreneurship in general, on female labour force participation and on female entrepreneurship. The paper deals with the methodological aspects of investigating (female) entrepreneurship by distinguishing between two measures of female entrepreneurship: the number of female entrepreneurs and the share of women in the total number of entrepreneurs. The first measure is used to investigate whether variables have an impact on entrepreneurship in general (influencing both the number of female and male entrepreneurs). The second measure is used to investigate whether factors have a differential relative impact on female and male entrepreneurship, i.e. whether they influence the diversity or gender composition of entrepreneurship. Findings indicate that – by and large – female and male entrepreneurial activity rates are influenced by the same factors and in the same direction. However, for some factors (e.g. unemployment, life satisfaction) we find a differential impact on female and male entrepreneurship. The present study also shows that the factors influencing the number of female entrepreneurs may be different from those influencing the share of female entrepreneurs. In this light it is important that governments are aware of what they want to accomplish (i.e. do they want to stimulate the number of female entrepreneurs or the gender composition of entrepreneurship) to be able to select appropriate policy measures. Verheul, I. Stel, A.J. van Thurik, A.R. http://repub.eur.nl/res/pub/9705/ 2006-01-01T00:00:00Z This paper investigates differences between opportunity and necessity entrepreneurs in terms of socio-demographics, attitudes and perception of obstacles . We use the 2004 Flash Eurobarometer Survey data. Explanatory variables include gender, age, education level and self-employed parents, risk tolerance, locus of control, perceptions of four obstacles and country effects. The obstacle variables include the perception of availibility of financial support; administrative complexity; of access to information on new venture creation and an unfavorable economic climate. Using probit equations we investigate differences in the preference for self-employment of opportunity and necessity entrepreneurs. A probit equation is estimated relating the explanatory variables to opportunity versus necessity entrepreneurship. Moreover, differences in the entrepreneurial engagement of opportunity and necessity entrepreneurs are investigated on the basis of a (ordered) multinomial logit model. Findings indicate that opportunity entrepreneurs have a higher preference for self-employment because of family encouragement. Also, opportunity entrepreneurs are found to perceive of administrative complexity and an unfavorable economic climate, negatively influencing their entrepreneurial involvement, while this is not the case for necessity entrepreneurs. Bhola, R. Verheul, I. Thurik, A.R. Grilo, I. http://repub.eur.nl/res/pub/7172/ 2005-12-19T00:00:00Z Using Global Entrepreneurship Monitor data for 29 countries this study investigates the (differential) impact of several factors on female and male entrepreneurship at the country level. These factors are derived from three streams of literature, including that on entrepreneurship in general, on female labor force participation and on female entrepreneurship. The paper deals with the methodological aspects of investigating (female) entrepreneurship by distinguishing between two measures of female entrepreneurship: the number of female entrepreneurs and the share of women in the total number of entrepreneurs. The first measure is used to investigate whether variables have an impact on entrepreneurship in general (influencing both the number of female and male entrepreneurs). The second measure is used to investigate whether factors have a differential relative impact on female and male entrepreneurship, i.e., whether they influence the diversity or gender composition of entrepreneurship. Findings indicate that – by and large – female and male entrepreneurial activity rates are influenced by the same factors and in the same direction. However, for some factors (e.g., unemployment, life satisfaction) we find a differential impact on female and male entrepreneurship. The present study also shows that the factors influencing the number of female entrepreneurs may be different from those influencing the share of female entrepreneurs. In this light it is important that governments are aware of what they want to accomplish (i.e., do they want to stimulate the number of female entrepreneurs or the gender composition of entrepreneurship) to be able to select appropriate policy measures. Verheul, I. Stel, A.J. van Thurik, A.R. http://repub.eur.nl/res/pub/15796/ 2005-12-01T00:00:00Z This paper uses 2004 survey data from the 15 old EU member states and the US to explain country differences in latent and actual entrepreneurship. Other than demographic variables such as gender, age and education, the set of covariates includes the perception by respondents of administrative complexities, of availability of financial support and of risk tolerance as well as country-specific effects. A comparison is made with results using a similar survey in 2000. While a majority of the surveyed population identifies lack of financial support as an obstacle to starting a new business, the role of this variable in both latent and actual entrepreneurship appears to be even more counterintuitive in 2004 than in 2000: it has no impact on actual entrepreneurship and is positively related to latent entrepreneurship. Administrative complexities, also perceived as an obstacle by a large majority of the population, have the expected negative impact both for latent and actual entrepreneurship in both years. Country-specific effects are important both for latent and actual entrepreneurship and the comparison of 2000 and 2004 results suggests that, once all other factors are controlled for, an improvement in actual entrepreneurship in the EU relative to the US has taken place in the last four years. However, in terms of unweighted averages actual entrepreneurship remained about the same. Latent entrepreneurship dropped while this drop seems to have occurred evenly in the US and the EU member states. Grilo, I. Thurik, A.R. http://repub.eur.nl/res/pub/9862/ 2005-12-01T00:00:00Z Determinants from different streams of literature and spanning different disciplines are used to explain entrepreneurial decisions. A multinomial logit model and survey data from the old 15 EU member states, Norway, Iceland, Liechtenstein and the US are used to establish the effect of demographic and other variables on various entrepreneurial engagement levels. These engagement levels range from “never thought about starting a business” to “thinking about it”, “taking steps for starting up”, “having a young business”, “having an older business” and “no longer being an entrepreneur”. Data of two Entrepreneurship Flash Eurobarometer surveys (2002 and 2003) containing over 20,000 observations are used. Other than demographic variables, the set of explanatory variables used includes the perception by respondents of ad-ministrative complexities, of availability of financial support and of risk tolerance, the respondents’ prefer-ence for self-employment and country specific effects. The most striking result is that the perception of lack of financial support has no discriminative effect across the various levels of entrepreneurial engagement. Thurik, A.R. Grilo, I. http://repub.eur.nl/res/pub/15798/ 2005-01-01T00:00:00Z A multinomial logit model and survey data from the 25 EU member states and the US are used to establish the effect of demographic and other variables on various entrepreneurial engagement levels. These engagement levels range from “never thought about starting a business” to “thinking about it”, “taking steps for starting up”, “having a young business”, “having an older business” and “no longer being an entrepreneur”. Data of the 2004 Entrepreneurship Flash Eurobarometer survey containing over 13,500 observations is used. Other than demographic variables such as gender, age, education level and whether parents are self-employed, the set of explanatory variables used includes country specific effects, measures of risk tolerance, internal and external locus of control and four perceptions of ’obstacles’. The ‘obstacle’ variables include the perception by respondents of administrative complexities, of availability of financial support, of accessibility of information for start-up and whether the current economic climate is favorable. Among the four perception variables only administrative complexities displays an unambiguous obstacle profile in that its presence has a significant negative impact on higher entrepreneurial engagement levels. Country effects suggest a clear underperformance of Europe relative to the US in less mature entrepreneurial phases. Grilo, I. Thurik, A.R. http://repub.eur.nl/res/pub/9706/ 2005-01-01T00:00:00Z Developing a dynamic SME sector is essential for countries transforming their centrally planned economy into a market oriented one. New firm formation is the major driver of this transition. Obviously, entrepreneurial energy is a necessary condition for new firm formation. This paper uses 2004 survey data from the 25 EU member states and the US to explain country differences in entrepreneurial energy. This energy is captured as latent and actual entrepreneurship. Latent entrepreneurship is measured by the probability of a declared preference for self-employment over employment. Next to demographic variables such as gender, age, education level and whether parents are self-employed, the set of explanatory variables used includes country specific effects, measures of risk tolerance, internal and external locus of control and four perceptions of obstacles . The obstacle variables include the perception by respondents of administrative complexities, of availability of financial support, of accessibility of information for start-up and whether the current economic climate is favorable. Specific attention is devoted to differences between the eight former communist member states and the 17 other EU member states. The most striking result is the higher influence of risk tolerance in shaping both latent and actual entrepreneurship in transition economies relative to market economies. Grilo, I. Thurik, A.R. http://repub.eur.nl/res/pub/9708/ 2005-01-01T00:00:00Z A multinomial logit model and survey data from the 25 EU member states and the US are used to establish the effect of demographic and other variables on various entrepreneurial engagement levels. These engagement levels range from never thought about starting a business to thinking about it , taking steps for starting up , having a young business , having an older business and no longer being an entrepreneur . Data of the 2004 Entrepreneurship Flash Eurobarometer survey containing over 13,500 observations is used. Other than demographic variables such as gender, age, education level and whether parents are self-employed, the set of explanatory variables used includes country specific effects, measures of risk tolerance, internal and external locus of control and four perceptions of obstacles . The obstacle variables include the perception by respondents of administrative complexities, of availability of financial support, of accessibility of information for start-up and whether the current economic climate is favorable. Among the four perception variables only administrative complexities displays an unambiguous obstacle profile in that its presence has a significant negative impact on higher entrepreneurial engagement levels. Country effects suggest a clear underperformance of Europe relative to the US in less mature entrepreneurial phases. Grilo, I. Thurik, A.R. http://repub.eur.nl/res/pub/9710/ 2005-01-01T00:00:00Z This paper uses 2004 survey data from the 15 old EU member states and the US to explain country differences in latent and actual entrepreneurship. Other than demographic variables such as gender, age and education, the set of covariates includes the perception by respondents of administrative complexities, of availability of financial support and of risk tolerance as well as country-specific effects. A comparison is made with results using a similar survey in 2000. While a majority of the surveyed population identifies lack of financial support as an obstacle to starting a new business, the role of this variable in both latent and actual entrepreneurship appears to be even more counterintuitive in 2004 than in 2000: it has no impact on actual entrepreneurship and is positively related to latent entrepreneurship. Administrative complexities, also perceived as an obstacle by a large majority of the population, have the expected negative impact both for latent and actual entrepreneurship in both years. Country-specific effects are important both for latent and actual entrepreneurship and the comparison of 2000 and 2004 results suggests that, once all other factors are controlled for, an improvement in actual entrepreneurship in the EU relative to the US has taken place in the last four years. However, in terms of unweighted averages actual entrepreneurship remained about the same. Latent entrepreneurship dropped while this drop seems to have occurred evenly in the US and the EU member states. Grilo, I. Thurik, A.R. 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. Stel, A.J. van Storey, D. Wennekers, A.R.M. Thurik, A.R. 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. Stel, A.J. van Wennekers, A.R.M. Reynolds, P. Thurik, A.R.