Skip to main content

Advertisement

SpringerLink
Log in

Entrepreneurship, economic development, and institutional environment: evidence from OECD countries

  • Published:
Journal of International Entrepreneurship Aims and scope Submit manuscript

Abstract

The purpose of this article is to establish a typology of entrepreneurship for OECD countries over the 1999–2012 period. Our aim is to draw a distinction between managerial and entrepreneurial economies, to identify groups of countries with similar economic and entrepreneurial activity variables, and to determine the economic and institutional drivers of entrepreneurial activities in each group. We show that the level of development, sectoral specialization, and institutional variables related to entrepreneurship, functioning of the labor market, and openness of the country are decisive to understand differences in entrepreneurship activity across countries. Results show that the pre-crisis period, from 1999 to 2008, is a period of growth favorable to entrepreneurship. The financial crisis involved a break in entrepreneurial dynamism, with agricultural economies withstanding the financial crisis better. The 2010–2012 period of recovery is a period of a sharp slowdown in entrepreneurial activity, during which the countries that are less dependent on the financial sector proved to be the most resilient in terms of entrepreneurial activity. Nevertheless, it is the advanced knowledge economies with developed financial markets, fewer institutional regulatory constraints, and greater scope for qualitative entrepreneurship that show lower unemployment rates. These findings have important implications for the implementation of public policy in order to promote entrepreneurial activity and reduce unemployment.

Résumé

L’objectif de cet article est d’élaborer une typologie des activités entrepreneuriales des pays de l’OCDE durant la période 1999–2012. Notre intention est d’établir une distinction entre les économies managériales et entrepreneuriales, d’identifier des groupes de pays ayant des comportements économiques et entrepreneuriaux similaires et d’identifier les déterminants économiques et institutionnels des activités entrepreneuriales dans chaque groupe. Nous montrons que le niveau de développement, la spécialisation sectorielle ainsi que les variables institutionnelles liées à l’entrepreneuriat, au fonctionnement du marché du travail et à l’ouverture du pays sont déterminants pour appréhender les différences nationales en matière d’activité entrepreneuriale. Les résultats montrent que la période antérieure à la crise, 1999–2008, est une période de croissance favorable à l’entrepreneuriat. La crise financière a provoqué une rupture du dynamisme entrepreneurial; ce sont les économies agricoles qui ont le mieux résisté à la crise financière. La période de reprise 2010–2012 est une période de fort ralentissement de l’activité entrepreneuriale, durant laquelle les économies dépendant largement du secteur financier sont les plus affectées par la crise en terme d’activité entrepreneuriale. Néanmoins ce sont les économies avancées de la connaissance caractérisées par des marchés financiers développés, peu de contraintes institutionnelles de régulation et un entrepreneuriat de qualité qui affichent les taux de chômage les plus faibles. Ces résultats ont des implications importantes pour la mise en œuvre des politiques publiques visant à promouvoir l’entrepreneuriat et à réduire le chômage.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4

Similar content being viewed by others

Notes

  1. “The Global Entrepreneurship Monitor (GEM) project is an annual assessment of the entrepreneurial activity, aspirations, and attitudes of individuals across a wide range of countries. Initiated in 1999 as a partnership between London Business School and Babson College, the first study covered ten countries; since then nearly 100 “National Teams” from every corner of the globe have participated in the project, which continues to grow annually (http://www.gemconsortium.org/What-is-GEM).

  2. The Total Early-stage Entrepreneurial Activity rate (TEA) is defined as the percentage of individuals aged 18–64 who are either actively involved in creating a business or running a business for less than 42 months.

  3. The Organization for Economic Cooperation and Development (OECD) is an international economic organization of 35 countries, founded in 1961 to stimulate economic progress and world trade. It is a forum of countries committed to democracy and the market economy, providing a platform to compare policy experiences, seek answers to common problems, identify good practices, and coordinate domestic and international policies of its members. The following listed countries belong to OECD (the 26 countries taken into account in the study due to data availability are in bold): Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the UK, and the USA.

  4. In 2010, the SBIR program across 11 federal agencies provided over $2 billion in grants and contracts to small US businesses for research in innovation leading to commercialization.

  5. The definition therefore includes both unincorporated and incorporated businesses and as such differs from the definition used in the System of National Accounts which classifies self-employed owners of incorporated businesses and quasi-corporation as employees. It should be noted that not all self-employed workers are “entrepreneurs.” Self-employment statistics include craft-workers and farmers.

  6. In the 2009 GEM (p. 5) report, Chile and Hungary—belonging to the group of efficiency-driven economies—are considered to be in transition towards the group of innovation-driven economies.

  7. Generalized Ward’s criteria, i.e., aggregation based on the criterion of the loss of minimal inertia.

  8. Remember that this variable is observed only in 1998, 2003, and 2008 in this period.

  9. This effect is clearly identified in the case of France (Aubry et al. 2014a, b Abdesselam et al. 2014).

  10. Remember that this variable is observed only in 2005, 2006, 2007, and 2008 for the period.

  11. In the case of France, entrepreneurship started to be dynamic in the early 2000s, supported by the implementation of public policies aiming to encourage entrepreneurship. In particular, the law for the economic initiative (August 2003), called Dutreil’s law, aims at making France one of Europe’s most favorable countries for new-firm start-ups: extension of the period in which it is permitted to domicile the new firm in one’s house (from 2 to 5 years), progressive capitalization of the social capital, simplification of administrative formalities, implementation of community finance institutions, etc.

  12. Luxembourg, which is a financial country, was recorded in the gray list of fiscal havens (very low fiscality, non-transparent tax system, non-cooperation with other states on tax information) some years ago. It has evolved and has since been removed from this list. Nevertheless, some characteristics are still at work.

  13. He also added Germany. We can note that these five countries also share low energy dependence, Norway being self-sufficient. It has developed a form of “state capitalism” that is responsible for managing the abundant natural resources (minerals, fjords, forests, waterfalls) (The Economist, February, 2–2013). The accumulated wealth allows Norway to operate a “fiscal policy rule” which releases oil wealth into the economy in a measured way in cyclical downturns and reduces the release when GDP growth is good.

  14. Reforms launched by the government of Chancellor Gerhard Schroeder (1998–2005) to enhance growth and reduce unemployment, as well as a government-subsidized reduced working hours scheme, help explain the relatively modest increase in unemployment during the 2008–09 recession. In France, thanks to a deep rise of the budget deficit from 3.3% of GDP in 2008 to 7.5% of GDP in 2009, activity is maintained but at the cost of public debt rising from 68% of GDP to nearly 94% in 2013. Franco-German trade also contributes to this result with nearly 16.5% of French exports being directed towards Germany (the first client), a weight more than two times higher than the countries that follow in the rankings. Even if French trade is structurally in deficit with Germany, there exist strong links between these two countries.

  15. OECD (2009) distinguishes three kinds of accompanying measures to address the financial constraints of SMEs: (a) measures supporting sales, cash flows, and working capital; (b) measures to enhance SMEs’ access to liquidity, mainly to bank lending; and (c) measures aimed at helping SMEs to maintain their investment level and more generally to build their capacity to respond in the near future to a possible surge in demand.

References

  • Abdesselam R, Bonnet J, Renou-Maissant P (2014) Typology of the French regional development: revealing the refugee versus Schumpeter effects in new-firm start-ups. Appl Econ 46(28):3437–3451. https://doi.org/10.1080/00036846.2014.931920

    Article  Google Scholar 

  • Acs ZJ (2006) How is entrepreneurship good for economic growth? Innov: Technol Gov Glob 1(1):97–107. https://doi.org/10.1162/itgg.2006.1.1.97

    Article  Google Scholar 

  • Acs ZJ, Amoros JE (2008) Introduction: the startup process. Estud Econ 35:121–132

    Google Scholar 

  • Acs ZJ, Szerb L (2007) Entrepreneurship, economic growth and public policy. Small Bus Econ 28(2-3):109–122. https://doi.org/10.1007/s11187-006-9012-3

    Article  Google Scholar 

  • Acs ZJ, Carlson B, Karlsson C (1999) The linkages among entrepreneurship, SMEs and the macroeconomy. In: Acs ZJ, Carlson B, Karlsson C (eds) Entrepreneurship, small and medium-sized enterprises and the macroeconomy. Cambridge University Press, Cambridge, pp 3–42

    Google Scholar 

  • Acs ZJ, Autio E, Szerb L (2014) National systems of entrepreneurship: measurement issues and policy implications. Res Policy 43(3):476–494. https://doi.org/10.1016/j.respol.2013.08.016

    Article  Google Scholar 

  • Aernoudt R (2004) Incubators, tool for entrepreneurship. Small Bus Econ 3:127–135

    Article  Google Scholar 

  • Aghion P (2014) Attraper sans problème un point de croissance supplémentaire. La Croix, September 8

  • Aparicio S, Urbano D, Audrestch D (2016) Institutional factors, opportunity entrepreneurship and economic growth; panel data evidence. Technol Forecast Soc Chang 102:45–61. https://doi.org/10.1016/j.techfore.2015.04.006

    Article  Google Scholar 

  • Aubry M, Bonnet J, Renou-Maissant P (2014a) Entrepreneurship and the business cycle: the “Schumpeter” effect versus the “refugee” effect-a French appraisal based on regional data. Ann Reg Sci 54:23–55. https://doi.org/10.1007/s00168-014-0645-x.

    Article  Google Scholar 

  • Aubry M, Bonnet J, Renou-Maissant P (2014b) Cycle économique et comportement entrepreneurial sur données régionales françaises. Rev Econ Rég Urb 4:643–675

    Google Scholar 

  • Audretsch DB (2007) Entrepreneurship capital and economic growth. Oxf Rev Econ Policy 23(1):63–78. https://doi.org/10.1093/oxrep/grm001

    Article  Google Scholar 

  • Audretsch DB, Thurik AR (2000) Capitalism and democracy in the 21st century: from the managed to the entrepreneurial economy. J Evol Econ 10(1-2):17–34. https://doi.org/10.1007/s001910050003

    Article  Google Scholar 

  • Audretsch DB, Thurik AR (2001) What’s new about the new economy? Sources of growth in the managed and entrepreneurial economies. Ind Corp Chang 10(1):267–315. https://doi.org/10.1093/icc/10.1.267

    Article  Google Scholar 

  • Baumol WJ (1990) Entrepreneurship, productive, unproductive and destructive. J Polit Econ 98(5, Part 1):893–921. https://doi.org/10.1086/261712

    Article  Google Scholar 

  • Bögenhold D, Fachinger U (2008) Do service sector trends stimulate entrepreneurship? A socio-economic labour market perspective. Int J Serv Econ Manag 1:117–134

    Google Scholar 

  • Bögenhold D, Heinonen J, Akola E (2017) Self-employment and independent professionals: labour market transitions and myths of entrepreneurship. In: Bonnet J, Dejardin M, Garcia Perez De Lema D (eds) Exploring the entrepreneurial society: institutions, behaviors and outcomes. E.E. Publishing, Cheltenham. https://doi.org/10.4337/9781783472666.00027

    Chapter  Google Scholar 

  • Bonnet J, Cussy P (2010) High education, sunk costs and entrepreneurship. In: Bonnet J, Garcia Perez De Lema D, Van Auken H (eds) The entrepreneurial society: how to fill the gap between knowledge and innovation. E.E. Publishing, Cheltenham, pp 37–53

    Chapter  Google Scholar 

  • Bonnet J, Garcia Perez De Lema D, Van Auken H (2010) The entrepreneurial society: how to fill the gap between knowledge and innovation. E.E. Publishing, Cheltenham. https://doi.org/10.4337/9781849806480

    Book  Google Scholar 

  • Bonnet J, Brau T, Cussy P (2011) Entrepreneurial decision-making. In: Dana LP (ed) World encyclopedia of entrepreneurship. E.E. Publishing, Cheltenham, pp 65–79. https://doi.org/10.4337/9781849808453.00014

    Chapter  Google Scholar 

  • Bosma N, Schutjens V (2011) Understanding regional variation in entrepreneurial activity and entrepreneurial attitude in Europe. Ann Reg Sci 47(3):711–742. https://doi.org/10.1007/s00168-010-0375-7

    Article  Google Scholar 

  • Bruton G, Ahlstrom D (2003) An institutional view of China’s venture capital industry: explaining the differences between China and the West. J Bus Ventur 18(2):233–260. https://doi.org/10.1016/S0883-9026(02)00079-4

    Article  Google Scholar 

  • Carree M, Van Stel A, Thurik AR, Wennekers S (2007) The relationship between economic development and business ownership revisited. Entrep Reg Dev 19:281–291

    Article  Google Scholar 

  • CGPME (2005) Jeunes et seniors: regards croisés sur l'entreprise. Enquête Ipsos/Planète PME. http://www.ipsos.fr/ipsos-public-affairs/actualites/2005-05-18-jeunes-et-seniors-regards-croises-sur-l-entreprise. Accessed May 2005

  • Craig B, Jackson W, Thomson J (2003) On SBA-guaranteed lending and economic growth. Working Paper, Federal Reserve Bank of Cleveland

  • Du K, O’Connor A (2017) Entrepreneurship and advancing national level economic efficiency. Small Bus Econ. https://doi.org/10.1007/s11187-017-9904-4

  • Dwyer GP, Lothian JR (2011) The financial crisis and recovery: why so slow? Federal Reserve Bank of Atlanta. https://www.frbatlanta.org/cenfis/publications/notesfromthevault/1110.aspx.

  • Escofier B, Pages J (1985) Mise en œuvre de l’AFM pour des tableaux numériques, qualitatifs ou mixtes. Internal publication, IRISA

  • Escofier B, Pages J (1998) Analyses factorielles multiples. Dunod, Paris

    Google Scholar 

  • Fachinger U, Frankus A (2017) Self-employment and pensions—is old age poverty the inevitable dark side of an entrepreneurial society? In: Bonnet J, Dejardin M, Garcia Perez De Lema D (eds) Exploring the entrepreneurial society: institutions, behaviors and outcomes. E.E. Publishing, Cheltenham. https://doi.org/10.4337/9781783472666.00029

    Chapter  Google Scholar 

  • Faggio G, Silva O (2012) Does self-employment measure entrepreneurship? Evidence from Great Britain. Discussion papers n°0109, Spatial Economics Research Centre, London School of Economics

  • GEM (Global Entrepreneurship Monitor) (2002) Global report. Reynolds PD, Bygrave WD, Autio E, Cox LW, Hay M. Founding and Sponsoring Institution: Babson College, Ewing Marion Kauffman Foundation, London Business School

  • GEM (Global Entrepreneurship Monitor) (2004) Executive report. Acs ZJ, Arenius P, Hay M, Minniti M, with contributions from Bosma N, Wennekers S, Carbonell S, Harding R, and Kam WP. Founding and Sponsoring Institutions: Babson College, Babson Park, MA, USA, London Business School, London, UK, Managing Editor: Mick Hancock

  • GEM (Global Entrepreneurship Monitor) (2006). Summary results. Bosma N and Harding R. Founding and Sponsoring Institution: Babson College and London Business School

  • GEM (Global Entrepreneurship Monitor) (2009) Executive report. Bosma N and Levie J, with contributions from Bygrave WD, Justo R, Lepoutre J and Terjesen S. Founding and Sponsoring Institutions, Babson College, Babson Park, MA, United States

  • GEM (Global Entrepreneurship Monitor) (2011). Global report. Kelley D, Singer S and Herrington M. Founding and Sponsoring Institutions: Babson College, Babson Park, MA, United States, Universidad del Desarrollo, Santiago, Chile, Universiti Tun Abdul Razak, Kuala Lampur, Malaysia, London Business School, London, United Kingdom

  • GEM (Global Entrepreneurship Monitor) (2013). Global report. Ernesto Amorós J, Bosma N. Founding and Sponsoring Institution: Universidad del Desarrollo, Santiago, Chile, Universiti Tun Abdul Razak, Kuala Lumpur, Malaysia, London Business School, London, United Kingdom

  • GEM (Global Entrepreneurship Monitor) (2014). Global report. Slavica Singer, José Ernesto Amorós, Daniel Moska Arreola. Founding and Sponsoring Institution: Babson College, Babson Park, MA, United States, Universidad del Desarrollo, Santiago, Chile, Universiti Tun Abdul Razak, Kuala Lumpur, Malaysia, Tecnológico de Monterrey, Monterrey, Mexico, London Business School, London, United Kingdom.

  • GEM (Global Entrepreneurship Monitor) (2015–2016). Global report. Donna Kelley, Slavica Singer, Mike Herrington. Founding and Sponsoring Institution: Babson College, Babson Park, MA, United States, Universidad del Desarrollo, Santiago, Chile, Universiti Tun Abdul Razak, Kuala Lumpur, Malaysia, London Business School, London, United Kingdom

  • GEM (Global Entrepreneurship Monitor) (2016–2017). Global report. Mike Herrington, Penny Kew. Founding and Sponsoring Institution: Babson College, Babson Park, MA, United States; London Business School, London, United Kingdom; Universidad del Desarrollo, Santiago, Chile; Universiti Tun Abdul Razak, Malaysia; Tecnológico de Monterrey, Mexico

  • Hill J (2012) Why did Australia fare so well in the global financial crisis? In: Ferran E, Moloney N, Hill JG, Coffee JC (eds) The regulatory aftermath of the global financial crisis. Sydney Law School Research Paper n°12/35, Cambridge University Press, Cambridge, pp 203–300

    Chapter  Google Scholar 

  • Klapper L, Love I (2011) The impact of the financial crisis on new firm registration. Econ Lett 113(1):1–4. https://doi.org/10.1016/j.econlet.2011.05.048

    Article  Google Scholar 

  • Koellinger PD (2008) Why are some entrepreneurs more innovative than others? Small Bus Econ 31(1):21–37. https://doi.org/10.1007/s11187-008-9107-0

    Article  Google Scholar 

  • Koellinger PD, Thurik AR (2012) Entrepreneurship and the business cycle. Rev Econ Stat 94(4):1143–1156. https://doi.org/10.1162/REST_a_00224

    Article  Google Scholar 

  • Kuznets S (1966) Modern economic growth. Yale University Press, New Haven

    Google Scholar 

  • Lucas RE (1978) On the size distribution of business firms. Bell J Econ 9(2):508–523. https://doi.org/10.2307/3003596

    Article  Google Scholar 

  • Martinez-Fierro S, Biedma-Ferrer JM, Ruiz-Navarro J (2016) Entrepreneurship and strategies for economic development. J Small Bus Econ 47(4):835–851. https://doi.org/10.1007/s11187-016-9738-5

    Article  Google Scholar 

  • Mitchell RK, Busenitz L, McDougall PP, Morse EA (2002) Toward a theory of entrepreneurial cognition: rethinking the people side of entrepreneurship research. Entrep Theory Pract 27(2):93–104. https://doi.org/10.1111/1540-8520.00001

    Article  Google Scholar 

  • Mueller SL, Thomas AS (2000) Culture and entrepreneurial potential: a nine country study of locus of control and innovativeness. J Bus Ventur 16:51–75

    Article  Google Scholar 

  • Naudé W (2010) Entrepreneurship, developing countries, and development economics: new approaches and insights. Small Bus Econ 34(1):1–12. https://doi.org/10.1007/s11187-009-9198-2

    Article  Google Scholar 

  • Nissan E, Martin MAG, Picazo MTM (2011) Relationship between organizations, institutions, entrepreneurship and economic growth process. Int Entrep Manag J 7(3):311–324. https://doi.org/10.1007/s11365-011-0191-2

    Article  Google Scholar 

  • North D (1990) Institutions, institutional change and economic performance. Cambridge University Press, Cambridge. https://doi.org/10.1017/CBO9780511808678

    Book  Google Scholar 

  • OECD (2009) The impact of the global crisis on SME and entrepreneurship financing and policy responses. Centre for Entrepreneurship, SMEs and Local Development

  • OECD (2013) Entrepreneurship at a glance. OECD Publishing. https://doi.org/10.1787/entrepreneur_aag-2013-en

  • Parker SC (2009) The economics of entrepreneurship. Cambridge University Press, Cambridge. https://doi.org/10.1017/CBO9780511817441

    Book  Google Scholar 

  • Pinho JC (2017) Institutional theory and global entrepreneurship: exploring differences between factor- versus innovation-driven countries. J Int Entrep 15(1):56–84. https://doi.org/10.1007/s10843-016-0193-9

    Article  Google Scholar 

  • Retis (2007) Rapport Bécard sur le renforcement des coopérations entre les structures d’appui à l’innovation et à la création d’entreprises, les écoles d’ingénieurs et les écoles de management. Ministère de l'économie des finances et de l'industrie, France

    Google Scholar 

  • Sambharya R, Musteen M (2014) Institutional environment and entrepreneurship: an empirical study across countries. J Int Entrep 12(4):314–330. https://doi.org/10.1007/s10843-014-0137-1

    Article  Google Scholar 

  • Scott WR (1995) Institutions and organizations. Sage Publications, Thousand Oaks

    Google Scholar 

  • Shapero A (1975) The displaced, uncomfortable entrepreneur. Psychol Today 9:83–88

    Google Scholar 

  • Sholman G, Van Stel A, Thurik AR (2012) Entrepreneurial activity and the cycle: the roles of observation frequency and economic openness. Extern rapport n° H201218, EIM Business and Policy Research, Zoetermeer

  • Siemer M (2014) Firm entry and employment dynamics in the Great Recession. Working paper, Federal Reserve

  • Simón-Moya V, Revuelto-Taboada L, Guerrero RF (2014) Institutional and economic drivers of entrepreneurship: an international perspective. J Bus Res 67(5):715–772. https://doi.org/10.1016/j.jbusres.2013.11.033

    Article  Google Scholar 

  • Solomon, D (2014) The recovery from the global financial crisis of 2008: missing in action. Euromonitor International. http://blog.euromonitor.com/2014/11/the-recovery-from-the-global-financial-crisis-of-2008-missing-in-action.html. Accessed 20 Nov 2014

  • Storey DJ (1991) The birth of new firms—does unemployment matter? A review of the evidence. Small Bus Econ 3(3):167–178. https://doi.org/10.1007/BF00400022

    Article  Google Scholar 

  • Syrquin M (1988) Patterns of structural change. In: Chenery H, Srinivasan TN (eds) Handbook of development economics. Elsevier, Amsterdam/New York, pp 203–273

    Chapter  Google Scholar 

  • Szerb L, Aidis R, Acs ZJ (2013) A comparative analysis of Hungary’s entrepreneurial performance in the 2006–2010 time period based on the Global Entrepreneurship Monitor and the Global Index methodologies. Found Trends Entre 9(1):1–142. https://doi.org/10.1561/0300000046

    Article  Google Scholar 

  • The Economist (2013) Norway: the rich cousin. The Economist. http://www.economist.com/news/special-report/21570842-oil-makes-norway-different-rest-region-only-up-point-rich. Accessed 2 Feb2013

  • Thurik AR (2011) From the managed to the entrepreneurial economy: considerations for developing and emerging countries. In: Naudé W (ed) Entrepreneurship and economic development. Palgrave Macmillan, England, pp 147–165. https://doi.org/10.1057/9780230295155_7

    Chapter  Google Scholar 

  • Thurik AR, Carree MA, Van Stel A, Audretsch DB (2008) Does self-employment reduce unemployment? J Bus Ventur 23(6):673–686. https://doi.org/10.1016/j.jbusvent.2008.01.007

    Article  Google Scholar 

  • Valdez M, Richardson J (2013) Institutional determinants of macro-level entrepreneurship. Entrep Theory Pract 37(5):1149–1175. https://doi.org/10.1111/etap.12000

    Article  Google Scholar 

  • Van Stel A, Carree MA (2004) Business ownership and sectoral growth; an empirical analysis of 21 OECD countries. Int Small Bus J 22(4):389–419. https://doi.org/10.1177/0266242604044306

    Article  Google Scholar 

  • Van Stel A, Carree MA, Thurik AR (2005) The effect of entrepreneurial activity on national economic growth. Small Bus Econ 24(3):311–321. https://doi.org/10.1007/s11187-005-1996-6

    Article  Google Scholar 

  • Van Stel A, Storey DJ, Thurik AR (2007) The effect of business regulations on nascent and young business entrepreneurship. Small Bus Econ 28(2-3):171–186. https://doi.org/10.1007/s11187-006-9014-1

    Article  Google Scholar 

  • Verheul I, Van Stel A (2007) Entrepreneurial diversity and economic growth. Extern rapport n° H200701, EIM Business and Policy Research, Zoetermeer

  • Wennekers S (2006) Entrepreneurship at country level: economic and non-economic determinants. Doctoral Thesis, Erasmus Research Institute of Management (ERIM)

  • Wennekers S, Van Stel A, Carree M, Thurik AR (2010) The relationship between entrepreneurship and economic development: is it U-shaped? Found Trends Entrep 6(3):167–237. https://doi.org/10.1561/0300000023

    Article  Google Scholar 

  • Wong PYH, Autio E (2005) Entrepreneurship, innovation and economic growth: evidence from the GEM data. Small Bus Econ 24(3):335–350. https://doi.org/10.1007/s11187-005-2000-1

    Article  Google Scholar 

  • World Bank (2014) World development indicators. Size of the economy. http://wdi.worldbank.org/table/1.1#.

  • Zhang M, Gao Q, Cho H-S (2017) The effect of sub-national institutions and international entrepreneurial capability on international performance of export-focused SMEs: evidence from China and South Korea. J Int Entrep 15(1):85–110. https://doi.org/10.1007/s10843-016-0196-6

    Article  Google Scholar 

  • Zwan P, Thurik R, Verheul I, Hessels J (2016) Factors influencing the entrepreneurial engagement of opportunity and necessity entrepreneurs. Eurasian Bus Rev 6:273–295

    Article  Google Scholar 

Download references

Acknowledgments

The authors would like to thank the reviewers for their helpful comments in improving the paper. All insufficiencies remain the authors’ responsibility.

Author information

Authors and Affiliations

  1. Lumière Lyon 2, COACTIS, EA 4161, Faculty of Economics and Management, University of Lyon, 16 quai Claude Bernard, 69365, Lyon Cedex 07, France

    Rafik Abdesselam

  2. NORMANDIE UNIV, UNICAEN, CNRS, CREM, Faculty SEGGAT, University of Caen Normandy, esplanade de la paix, 14032, Caen, France

    Jean Bonnet & Patricia Renou-Maissant

  3. METIS Research Department, Management School of Normandy, 9, rue Claude Bloch, 14052, Caen Cedex 4, France

    Mathilde Aubry

Authors
  1. Rafik Abdesselam
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Jean Bonnet
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Patricia Renou-Maissant
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Mathilde Aubry
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Rafik Abdesselam.

Appendix

Appendix

The hierarchical cluster analysis (HCA)

The HCA according to Ward’s method consists of gathering classes for which the loss of inertia between classes ΔI B is the lowest. In this case, the distance between two classes is measured by the loss of inertia that one undergoes in the gathering, called the cluster index or index level of the clustering. A high loss of inertia means that the two classes k and k −1 that have been grouped are quite distant from each other. Then a “good” partition is a partition that precedes a significant loss of inertia. It is this test that is commonly used to select the number of classes for HCA.

The choice of the number of classes is usually accomplished from the diagram of aggregate indices. This is a crucial aspect of the evaluation of the proposed solutions when analyzing a hierarchical classification; one is faced with the problem of getting too many or too few classes. However, while there is no single index to determine the optimal number of classes, many criteria can be used to facilitate this decision. First, it is possible to take a decision based on the characterization of classes by the active variables with α = 0.05, a classic level of significance. If the profiles and/or anti-profiles of the obtained classes differ significantly on these variables for the classification, the proposed solution is probably relevant. Second, the ease of interpretation is also a criterion that tells us the required number of classes. It is important to question the relevance of the theoretical profiles and/or anti-profiles obtained. Finally, the size of the sample must also be taken into consideration: the larger the sample, the higher the number of classes.

Statistical criteria can be also used to decide how many classes to choose, such as the semi-partial R-squared (SPR2) or the R-squared (R 2).

- The SPR2 = ΔI B / I T measures the loss of inertia between classes or cluster indexes ΔI B as a percentage of total inertia I T caused by grouping two classes. The goal is to have a maximum within-classes inertia, and we look for a low SPR2 followed by a strong SPR2 at the following aggregation: a hollow for k classes and a peak for k −1 classes indicates a good classification in k −1 classes. This means that we must cut the hierarchical tree before heavy loss of inertia: a low value of SPR2 means the fusion of two homogeneous classes.

- The R 2 = I B/I T is the proportion of variance explained by classes; it measures the quality of the classification. Its value should be as close as possible to one without too many classes; the ideal is to stop after the last big jump.

To assess the stability of obtained classes of HCA, we have consolidated all the classes, using a non-hierarchical cluster analysis, more robust, with mobile centers (k-means). The interpretation of a class is a qualitative description of their profile and/or anti-profile created from the active variables—those on which we wanted to differentiate the classes—but also with other additional (illustrative) variables selected. A generic name has been assigned to each class of HCA.

Fig. 5
figure 5

Hierarchical tree over the 1999 to 2008 period for the 26 OECD countries

Full size image
Table 2 Synthesis of the partition into six classes of the 26 OECD countries over the period 1999–2008
Full size table
Fig. 6
figure 6

Hierarchical tree in 2009 for the 26 OECD countries

Full size image
Table 3 Synthesis of the partition into four classes of the 26 OECD countries in 2009
Full size table
Fig. 7
figure 7

Hierarchical tree over the 2010–2012 period for the 26 OECD countries

Full size image
Table 4 Synthesis of the partition into five classes of the 26 OECD countries over the period 2010–2012
Full size table
Table 5 Trajectories and resemblances in development for the 26 countries of the OECD
Full size table

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Abdesselam, R., Bonnet, J., Renou-Maissant, P. et al. Entrepreneurship, economic development, and institutional environment: evidence from OECD countries. J Int Entrep 16, 504–546 (2018). https://doi.org/10.1007/s10843-017-0214-3

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10843-017-0214-3

Keywords

JEL codes

Search

Navigation