Designing Composite Entrepreneurship Indicators: An Application Using Consensus PCA
ENTREPRENEURSHIP AND ECONOMIC DEVELOPMENT: DESIGNING COMPOSITE ENTREPRENEURSHIP INDICATORS, Chapter 3, Wim Naudé, ed., Palgrave MacMillan, 2011
39 Pages Posted: 22 Jan 2012
Date Written: June 20, 2009
Existing indicators of entrepreneurial activity (such as the Global Entrepreneurship Monitor, Entrepreneurship Barometer, FORA’s Entrepreneurship Index, OECD and Economic Commission’s sets of indicators, among others) and several variables that have been considered good proxies for entrepreneurship during the last decades seem to be unsuitable to capture the complex relationship among economic, social, and demographic factors driving entrepreneurial activity.
In order to suggest a consistent methodology for measuring entrepreneurship, we review some of the most well-known theoretical dimensions of entrepreneurship and a selection of associated indicators is proposed. Indicators and measures are grouped under theoretical categories and a set of entrepreneurship indicators is constructed using multivariate statistical analysis (Consensus PCA based on NIPALS, with an extension of Probability PCA for dealing with missing values) for a panel of developed and developing countries.
Keywords: entrepreneurship, index, principal components analysis
JEL Classification: L26, M13, C82
Suggested Citation: Suggested Citation