This paper uses 2004 survey data from the 15
old EU member states and the US to explain country differences in latent
and actual entrepreneurship. Other than demographic variables such as
gender, age and education, the set of covariates includes the perception
by respondents of administrative complexities, of availability of
financial support and of risk tolerance as well as country-specific
effects. A comparison is made with results using a similar survey in 2000.
While a majority of the surveyed population identifies lack of financial
support as an obstacle to starting a new business, the role of this
variable in both latent and actual entrepreneurship appears to be even
more counterintuitive in 2004 than in 2000: it has no impact on actual
entrepreneurship and is positively related to latent entrepreneurship.
Administrative complexities, also perceived as an obstacle by a large
majority of the population, have the expected negative impact both for
latent and actual entrepreneurship in both years. Country-specific effects
are important both for latent and actual entrepreneurship and the
comparison of 2000 and 2004 results suggests that, once all other factors
are controlled for, an improvement in actual entrepreneurship in the EU
relative to the US has taken place in the last four years. However, in
terms of unweighted averages actual entrepreneurship remained about the
same. Latent entrepreneurship dropped while this drop seems to have
occurred evenly in the US and the EU member states
