IQ and Entrepreneurship: International Evidence

Abstract

National measures of cognitive skill, including IQ tests, have received attention recently as a possible driver of cross-country productivity differences. In a parallel literature, national measures of entrepreneurial activity and pro-entrepreneurship policies have received similar attention. This paper is the first to demonstrate that higher national average IQ reliably predicts higher ratings for the Acs-Szerb Global Entrepreneurship Development Index (GEDI). Results hold after controlling for GDP, education levels, inequality, broad economic freedom indices, and other factors. Microfounded explanations for these results are considered.

Keywords: entrepreneurship, human capital, intelligence, IQ

JEL Classification: L26, E24, J24