Evaluating the Determinants of Nascent Entrepreneurship Among Countries

Evaluating the Determinants of Nascent Entrepreneurship Among Countries

Maria Manuela Santos Natário (Guarda Polytechnic Institute, Portugal)
Copyright: © 2018 |Pages: 17
DOI: 10.4018/978-1-5225-2936-1.ch016
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Abstract

This chapter reflects upon factors that influence nascent entrepreneurship across countries. Correlation analysis is applied using various explanatory variables derived from different approaches. Clusters analysis is applied to verify how different countries are positioned in terms of nascent entrepreneurship. Scheffe's test of mean differences distinguish the unique characteristics of each cluster and assess the principal determinants of the nascent entrepreneurship capacity. The chapter uses the global entrepreneurship monitor (GEM) database and nascent entrepreneurship rates for 52 countries (in 2015), as well as the competitiveness database (2015-16) of the World Economic Forum and Hofstede's cultural dimensions. Analysis from the different approaches assumes that nascent entrepreneurship depends upon the competitive level of the country. In addition, it assumes that nascent entrepreneurship is a cultural phenomenon.
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Literature Review

The GEM considers entrepreneurial activity according to: (1) venture lifecycle phases (nascent, new venture, established venture, discontinuation); (2) types of activity (high growth, innovation, internationalization); (3) and the sector of the activity (total early-stage entrepreneurial activity [TEA], social entrepreneurial activity [SEA], employee entrepreneurial activity [EEA]) (Singer et al., 2015).

Nascent entrepreneurship rate is defined as the percentage of individuals aged 18-64 who are currently a nascent entrepreneur. In other words, they are actively involved in establishing a business they will own or co-own; this business has not paid salaries, wages, or other payments to the owners for more than three months (Singer et al., 2015). Nascent entrepreneurs are engaged in creating new ventures (Wagner, 2004). Gutterman (2016) considers the nascent entrepreneur phase as covering the first three months after the entrepreneur establishes a new business to pursue identified opportunities.

New business ownership rate is the percentage of individuals aged 18-64 who are currently an owner-manager of a new business. In other words, they own and manage a business that has paid salaries, wages, or other payments to the owners for more than three months but no more than 42 months (Singer et al., 2015).

Entrepreneurship, particularly nascent entrepreneurship, is important for the foundation of new firms and newly-founded firms related to economic development of nations and regions (Wagner, 2004). Effectively, there is a positive impact of entrepreneurship on economic growth (Carree & Thurik, 2003; van Stel et al., 2004). According to Singer et al. (2015, p. 9), entrepreneurship initiatives are important because they “contribute to job creation while strengthening the national economy and social development through the transfer of knowledge for business creation, development, and growth.”

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