Culture, Entrepreneurship and Economic Development. An Empirical Approach

Monica Violeta Achim · Sorin Nicolae Borlea · Viorela Ligia Văidean

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Culture, Economy, and Development Studies Entrepreneurship Studies and Influences Cultural Differences and Values

Abstract

Abstract This paper investigates the influence of culture on the level of entrepreneurship and the possible moderating role of the level of economic development upon this relationship. For our purpose, an initial sample of 125 countries (43 high-income and 82 low-income countries) is used, over the 2006–2016 time period. At first, we use a panel analysis of the reduced sample which is furthermore completed by a hierarchical regression analysis. Our main results provide clear evidence that culture represents an important predictor of the level of entrepreneurship. Among the dimensions of culture, uncertainty avoidance and indulgence versus restraint are found to have the highest influence upon the level of entrepreneurship. Moreover, our empirical findings reveal that the relationship between culture and entrepreneurship is moderated differently by economic development. Thus, high-income countries face a three times higher rate of entrepreneurship than low-income countries. Our findings suggest that culture is more valued in high-income countries offering a higher social support in entrepreneurial activities than in low-income countries. We also find that some cultural patterns such as individualism, femininity, low uncertainly avoidance, short-term orientation or restrain may stimulate entrepreneurship in high-income countries but may be very dysfunctional in low-income countries. Our findings are also useful for policy makers to acknowledge the relationship between the cultural values of a country and its entrepreneurial activities, in order to adjust their policy measures for a better stimulation of the business environment.

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References

2007The Social Responsibility of Business Is to Increase Its Profits 2006Entrepreneurial Action And The Role Of Uncertainty In The Theory Of The Entrepreneur 2001Culture and entrepreneurial potential 2003Social Networks and Entrepreneurship 2005The Effect of Entrepreneurial Activity on National Economic Growth 2002National Culture and Entrepreneurship : A Review of Behavioral Research 2005Nascent Entrepreneurship and the Level of Economic Development 2006Why Do Some Family Businesses Out–Compete? Governance, Long–Term Orientations, and Sustainable Capability

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