Date: 18 Sep 2012

Entrepreneurs or employees: a cross-cultural cognitive analysis

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Abstract

This study examines the influence of the cultural-cognitive dimension - measured through creativity, risk taking and independence - on the probability of becoming an entrepreneur or an employee. Institutional economics is used as theoretical framework of the research. The empirical research uses binomial and multinomial probit models, when controlling for socio-demographic factors and macro variables. Data was obtained from the World Values Survey, for the period 2005-2008, considering a sample of 41 countries and 56,875 individuals. The main findings demonstrate that creativity, risk taking and independence increase the probability of becoming entrepreneur, and decrease the probability of becoming employee. Given that these characteristics facilitate the birth of new ideas, processes, products, and services, it is crucial to learn from entrepreneurs, and to foster such characteristics within organizations. The results have contributions for both researchers and policymakers on new firm creation (entrepreneurship) and on the generation of innovation within organisations (intrapreneurship).