Nascent Entrepreneurship and the Level of Economic Development

Posted: 18 Nov 2009

See all articles by Roy Thurik

Roy Thurik

Montpellier Business School; Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC); Erasmus Research Institute of Management (ERIM); EIM Netherlands - Business and Policy Research; Tinbergen Institute

Paul D. Reynolds

Florida International University, Eugenio Pino & Family Global Entrepreneurship Center

S. Wennekers

EIM Netherlands - Business and Policy Research

Andre J. van Stel

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics

Date Written: 2005

Abstract

A country's level of economic development may impactits level of entrepreneurial development.A U-shaped relationship betweeneconomic development and entrepreneurial development may occur as a nationdevelops economically. The validity of this hypothesized relationship isinvestigated. The literature review presents studies regarding both the process ofeconomic development and the links between a country's economic development andits rate of entrepreneurship.The data were provided by the GlobalEntrepreneurship Monitor (GEM), which examines the rate of nascententrepreneurship.Data from countries participating in the 2002 GEMprogram were utilized. Also included were data from the 2002 World DevelopmentIndicators database of the World Bank, as well as the GCR Innovation CapacityIndex of the Global Competitiveness Report 2001-2002 of the World EconomicForum. The data were analyzed through a series of three regressions. The first tworegressions found support for the U-shaped relationship between nascententrepreneurship and per capita income and between nascent entrepreneurship andthe innovative capacity index.The results of the third regression againstseveral control variables were mixed.The findings further indicate that a"natural rate" of entrepreneurship is, to an extent, governed by lawsrelated to economic development. (AKP)

Keywords: Institutional factors, Nascent entrepreneurship, GCR Innovation Capacity Index, Entrepreneurial activity, Economic development, Global Entrepreneurship Monitor (GEM), Income, Public policies, Social factors, Startup rates, Business conditions, Demographics

Suggested Citation

Thurik, Roy and Reynolds, Paul D. and Wennekers, Sander and van Stel, Andre J., Nascent Entrepreneurship and the Level of Economic Development (2005). Small Business Economics, Vol. 24, Issue 3, p. 293-309 2005. Available at SSRN: https://ssrn.com/abstract=1508277

Roy Thurik (Contact Author)

Montpellier Business School

France

Erasmus University Rotterdam (EUR) - Centre for Advanced Small Business Economics (CASBEC) ( email )

3000 DR Rotterdam
Netherlands
+31 10 408 2232 (Phone)
+31 10 408 9146 (Fax)

HOME PAGE: http://www.thurik.com

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

EIM Netherlands - Business and Policy Research

Postbus 7001
2701 AA Zoetermeer
Netherlands
+31 79 341 3634 (Phone)
+31 79 331 3742 (Fax)

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Paul D. Reynolds

Florida International University, Eugenio Pino & Family Global Entrepreneurship Center ( email )

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Sander Wennekers

EIM Netherlands - Business and Policy Research ( email )

Postbus 7001
2701 AA Zoetermeer
Netherlands
31 79 3413634 (Phone)

Andre J. Van Stel

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics ( email )

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

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