Why Are Some Nations More Entrepreneurial than Others? The Role of National Culture in Organizational Founding Rates

47 Pages Posted: 16 Jun 2022

See all articles by Valentina Assenova

Valentina Assenova

University of Pennsylvania - The Wharton School

Raphael ('Raffi") H. Amit

The Wharton School UPENN

Date Written: Oct 25, 2021

Abstract

Why are some nations more entrepreneurial than others? This study examines the cultural antecedents of cross-national variation in the rates of organizational founding. It argues that some nations became more entrepreneurial than others through their adaptive response to ecological adversity. Nations that historically faced low ecological adversity developed cultural systems that favored rule-breaking versus rule-following (cultural looseness versus tightness). These behavioral and psychological adaptations developed to cope with adversity affected the cultural support for entrepreneurial activity, and a host of behavioral determinants of organizational founding, including national attitudes, abilities, and aspirations toward entrepreneurship, opportunity perception, risk acceptance, and opportunity motivations for entry into entrepreneurship – factors predictive of higher rates of organizational founding. Consistent with this explanation, archival evidence about the prevalence of ecological adversity in 230 geopolitical regions of the world shows that low levels of ecological adversity correspond to high levels of cultural looseness, which contributed to high rates of organizational founding.

Keywords: entrepreneurship, culture, ecology, cross-national differences

JEL Classification: L26, M13, O57, O44, Z13

Suggested Citation

Assenova, Valentina and Amit, Raphael H., Why Are Some Nations More Entrepreneurial than Others? The Role of National Culture in Organizational Founding Rates (Oct 25, 2021). Available at SSRN: https://ssrn.com/abstract=4133792 or http://dx.doi.org/10.2139/ssrn.4133792

Valentina Assenova (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3620 Locust Walk
SHDH Suite 2000
Philadelphia, PA 19104-6370
United States

Raphael H. Amit

The Wharton School UPENN ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104-6370
United States
215 898 7731 (Phone)

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