Determinants of entrepreneurial engagement levels in Europe and the US

In this article, the process of the entrepreneurial decision is decomposed in seven engagement levels ranging from "never thought about starting a business" to "gave up," "thinking about it," "taking steps for starting up," "having a young business," "having an older business," and "no longer being an entrepreneur." By using a multinomial logit model, we allow the effect of covariates to differ across the various entrepreneurial engagement levels. Data from two Entrepreneurship Flash Eurobarometer surveys (2002 and 2003) containing over 20,000 observations of the 15 old EU Member States, Norway, Iceland, Liechtenstein, and the United States are used. Other than demographic variables, the set of explanatory variables used includes the perception by respondents of administrative complexities, of availability of financial support, and of risk tolerance, the respondents' preference for self-employment and country-specific effects. Among our results, we find that the perception of lack of financial support has no discriminative effect across the various levels of entrepreneurial engagement while perception of administrative complexities plays a negative role only for high levels of engagement.