Entrepreneurial attitude and economic growth; a cross-section of 54 regions

Over the past ten years the concept of regional clustering has gained much popularity in business, government, and the academic world. In regional economics, much attention has been devoted to explain the economic success of certain regions all around the world. Theoretical concepts like industrial districts, regional innovation systems and the learning region link the geographical concentration of firms and regional institutions to the innovativeness of these firms. Terms like 'regional innovative capacity' (Lawson and Lorenz, 1999), 'enterprise culture' (Amin and Tomaney, 1991), 'entrepreneurial ability' (Kangaharju, 2000), 'entrepreneurial human capital' (Georgellis and Wall, 2000) and 'regional cultures of innovation' (Thomas, 2000) are frequently used in the literature on regional clusters. In general, it is argued that local social conditions play an important role in the genesis and assimilation of innovation and its transformation into economic growth. More specific, entrepreneurial skills are seen as the soft factors that contribute to a regional culture that facilitates the success of regional clusters and regional economies in general.In this paper we test if certain societal characteristics are related to regional economic growth. In specific, we test if regions that can be characterised as 'entrepreneurial', experience faster economic growth than regions that score lower on entrepreneurial characteristics. Despite the growing literature in the field of economic geography and regional economics in which the role of entrepreneurial skills is stressed, to our knowledge nobody has explicated the values that make up this entrepreneurial capital. It is in most cases a black box, which is commonly referred to, but never explicated. Using a unique data-set on norms and values in 54 European regions, we distinguish values that characterise entrepreneurs, which enables us to construct a regional aggregate that reflects the average score on entrepreneurial attitude of the populations in these 54 European regions. The paper is divided in two parts. First, we study entrepreneurs and compare their personality characteristics with those of wage and salary-earners. Based on a sample of 18,418 individuals we find that entrepreneurs differ in several ways. The next step consists of aggregating these characteristics for 54 regions in Europe. By using principal components analysis, we construct a measure of entrepreneurial capital for each region. Based on standard growth theory we test if regions that have more entrepreneurial capital experience faster economic growth in the period 1950-1998. The added value of the paper is twofold. First, we show that entrepreneurs differ from the wage and salary-earners in several ways. Entrepreneurship requires aptitudes that are only present in a small portion of a population. Second, we study 54 regions in Europe and show that regions scoring higher on these entrepreneurial characteristics experience faster economic growth, conditional on factors like human capital, investment ratio and spatial auto-correlation. By unravelling the soft factors influencing economic growth we open the black box of regional culture. There are regional differences in entrepreneurial attitude, and a relatively high score on entrepreneurial characteristics is correlated with a relatively high rate of regional economic growth.

Sources, measurement and effect of trust in the governance of buyer-supplier relations

The paper considers a (static) portfolio system that satisfies adding-up contraints and the gross substitution theorem. The paper shows the relationship of the two conditions to the weak dominant diagonal property of the matrix of interest rate elasticities. This enables to investigate the impact of simultaneous changes in interest rates on the asset demands.

The role of dissatisfaction and per capita income in explaining self-employment across 15 European countries

This paper deals with explaining the sizable differences in the rate of self-employment (business ownership) across 15 European countries in the period 1978-2000, within a framework of occupational choice, focusing on the influence of dissatisfaction and of per capita income. Using two different measures of dissatisfaction, in addition to the level of economic development and controlling for several other variables, we find that, in addition to a negative and significant impact of per capita income, dissatisfaction at the level of societies has a positive and significant influence on self-employment levels. Both dissatisfaction with life and dissatisfaction with the way democracy works are found to influence self-employment. It is concluded that these are proxies for job dissatisfaction and at the same time represent other negative "displacements" known to promote self-employment. The findings indirectly point at the potential importance of push factors within the incentive structures of modern economies.

Self-employment across 15 European countries: the role of dissatisfaction

This paper deals with differences in the rate of self-employment (business ownership) in 15 European countries for the period 1978-2000, focusing on the influence of dissatisfaction and using the framework of occupational choice. Using two different measures of dissatisfaction, in addition to the level of economic development, the unemployment rate and income differentials, we find that dissatisfaction at the level of societies is the most significant factor for explaining differences in self-employment levels. Dissatisfaction with life and with the way democracy works are both found to be positively related to self-employment. It is concluded that these are proxies for job dissatisfaction and at the same time represent other negative 'displacements' known to promote self-employment.

Uncertainty avoidance and the rate of business ownership across 21 OECD countries, 1976-2004

Persistent differences in the level of business ownership across countries have attracted the attention of scientific as well as political debate. Cultural as well as economic influences are assumed to play a role. This paper deals with the influence of cultural attitudes towards uncertainty on the level of business ownership across 21 OECD countries. First, the concepts of uncertainty and risk are elaborated, as well as their relevance for entrepreneurship. An occupational choice model is introduced to underpin our reasoning at the macro-level. Second, regression analysis using pooled macro data for 1976, 1990 and 2004 and controlling for several economic variables, yields evidence that uncertainty avoidance is positively correlated with the prevalence of business ownership. According to our model, a restrictive climate of large organizations in high uncertainty avoidance countries pushes individuals striving for autonomy towards self-employment.�Regressions for these three years separately show that in 2004 this positive correlation is no longer found, indicating that a compensating pull of entrepreneurship in countries with low uncertainty avoidance may have gained momentum in recent years. Third, an interaction term between uncertainty avoidance and GDP per capita in the pooled panel regressions shows that the historical negative relationship between GDP per capita and the level of business ownership is substantially weaker for countries with lower uncertainty avoidance. This suggests that rising opportunity costs of self-employment play a less important role in this cultural environment, or are being compensated by increasing entrepreneurial opportunities.