Determinants and Effects of New Business Creation Using Global Entrepreneurship Monitor Data

Abstract.

This paper is an introduction to the present special issue dedicated to scientific research using data collected as part of the Global Entrepreneurship Monitor (GEM) and considering new venture creation as the hallmark of entrepreneurship. After a short description of GEM’s theoretical and methodological background, this introduction highlights the main results of seven papers which were presented at the First GEM Research Conference in Berlin from 1 to 3 April 2004. First, there is empirical evidence that the role of entrepreneurial activity differs across the stages of economic development, in that there appears to be a U-shaped relationship between the level of development and the rate of entrepreneurship. Consequently, a positive effect of entrepreneurial activity on economic growth is found for highly developed countries but a negative effect for developing nations. Second, it is shown that different types of entrepreneurship may have a different impact on a nation’s innovativeness and economic growth rate. In particular, potentially high-growth business start-ups and so-called opportunity entrepreneurship enhance knowledge spillovers and economic growth. Third, entrepreneurship is again shown to be a regional event that can only be understood if regional framework conditions, including networks and regional policies, are taken into consideration.