institutional determinants of growth aspiration ... determinants of growth-aspiration...

Download INSTITUTIONAL DETERMINANTS OF GROWTH ASPIRATION ...  DETERMINANTS OF GROWTH-ASPIRATION ENTREPRENEURSHIP. ... investigating the institutional determinants of growth-aspiration ... 4.4 Model selection ...Authors: Zuleyha KaraagacAbout: Fixed effects model  Panel data  Entrepreneurship  Interaction

Post on 09-May-2018

212 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

  • INSTITUTIONAL DETERMINANTS OF GROWTH-ASPIRATION ENTREPRENEURSHIP

    Zuleyha Karaagac

    Masters by Research

    A thesis submitted in fulfilment of the requirements for the degree of

    Master of Management (Research)

    Australian Centre for Entrepreneurship Research

    QUT Business School

    Queensland University of Technology

    Brisbane, Australia

    June 2014

  • i

    Keywords

    Cross-country, economic growth, entrepreneurship, fixed-effect, growth aspiration,

    human capital, institutions, interaction, panel data

  • ii

    Abstract

    Despite the increasing attention on the importance of entrepreneurship in

    economic growth, researchers are still challenged to explain precisely why

    entrepreneurial activity and its impact differ across countries (Carree, Stel, Thurik, &

    Wennekers, 2002; Hechavarria & Reynolds, 2009; Stenholm, Acs, & Wuebker,

    2013; Wennekers, 2006). While some attention has been devoted to understanding

    the national level institutional determinants of entrepreneurship, these studies

    primarily focus on the impact of the institutional environment on the rate of

    entrepreneurial activity across countries (Carree & Thurik, 2010; Stel, Carree, &

    Thurik, 2005; Sternberg & Wennekers, 2005; Wennekers, 2006). Thus they tend not

    to consider how the same institutional arrangements might influence the quality of

    entrepreneurial activity. Little empirical research has been undertaken on the effect

    of the institutional arrangement on the allocation of entrepreneurial effort to specific

    types of entrepreneurial activity such as high growth-aspiration entrepreneurship,

    which has significant job creation potential (Estrin, Korosteleva, & Mickiewicz,

    2012; Estrin & Mickiewicz, 2010; Hessels, Gelderen, & Thurik, 2008).

    Although there is strong evidence of the importance of growth aspiring

    entrepreneurial activity for economic prosperity, less is known about what drives the

    prevalence of growth-aspiration entrepreneurship at the country level. Previous

    individual level studies demonstrate a strong link between growth aspiration and

    entrepreneurs human capital. However, little is known about how human capital

    accumulation at country level influences the prevalence of growth-aspirations

    entrepreneurship. The purpose of this study is to contribute to the literature by further

  • 3

    investigating the institutional determinants of growth-aspiration entrepreneurship and

    the role of country-level human capital on the prevalence of growth-aspiration

    entrepreneurial activity.

    The study constructs datasets on entrepreneurial activity and aspiration by merging

    cross-country panel data on 48 countries from the Global Entrepreneurship Monitor

    (GEM) and other sources, over a six-year period (2007-2012). The GEM project is

    an annual assessment of the entrepreneurial activity, aspirations and attitudes of

    individuals across a wide range of countries. GEM is unique because, unlike other

    entrepreneurship data sets that measure newer and smaller firms, GEM studies the

    behaviour of individuals with respect to starting and managing a business. This

    approach provides a more detailed picture of entrepreneurial activity than is found in

    official national registry data sets (Bosma, Coduras, Litovsky, & Seaman, 2012).

    Using country-level panel-data analysis, this study validates some previous empirical

    research based on cross-sectional country analysis, and individual level studies. Yet

    this study is, to our knowledge, the first to test to what extent stronger country-level

    human capital accumulation is to coincides with the prevalence of growth-aspiration

    entrepreneurship.

    Overall findings in the study suggest that there are different institutional

    determinants associated with the prevalence of growth-aspiration entrepreneurship in

    developing countries and developed countries. In developing countries, having a

    business-friendly environment with limited government interference is positively

    associated with the prevalence of growth-aspiration entrepreneurship. In developed

    countries, ease of regulations on business practice and intellectual property right

  • 4

    protection is a more important determinant for the prevalence of growth-aspiration

    entrepreneurship. The study also found that country-level human capital moderates

    the effect of the institutional environment in countries. These findings indicate that

    when there are improvements in the institutional conditions in countries, there are

    more jobs created by larger firms (including foreign direct investment in developing

    countries) and better employment opportunities for high potential entrepreneurs. The

    study findings suggest that the opportunity cost of alternative job opportunity

    discourages high potential entrepreneurs to engage in growth-aspiration

    entrepreneurship.

    Since the findings show that country level human capital accumulation is not directly

    associated with the prevalence of growth-aspiration entrepreneurship, the study

    suggests that institutional incentives are needed to attract individuals to invest their

    valuable human capital into growth-oriented entrepreneurship. One strategy would

    be expanding entrepreneurial education and training in order to develop a larger

    cohort of individuals with the competencies needed to have the confidence to

    allocate their human capital into high-potential growth-aspiration entrepreneurial

    activity.

  • 5

    Table of Contents

    Keywords .................................................................................................................................................i

    Abstract .................................................................................................................................................. ii

    Table of Contents ....................................................................................................................................v

    List of Figures ...................................................................................................................................... vii

    List of Tables ...................................................................................................................................... viii

    List of Abbreviations..............................................................................................................................ix

    Statement of Original Authorship ...........................................................................................................x

    Acknowledgements ................................................................................................................................xi

    CHAPTER 1: INTRODUCTION .......................................................................................................1

    1.1 Background ..................................................................................................................................1

    1.2 Research aim and objectives ........................................................................................................6

    1.3 Data and methodology .................................................................................................................8

    1.4 Thesis outline ...............................................................................................................................9

    CHAPTER 2: LITERATURE REVIEW .........................................................................................11

    2.1 Introduction................................................................................................................................11

    2.2 Entrepreneurship and economic growth.....................................................................................11

    2.3 The institutional determinants of entrepreneurship ....................................................................20

    2.4 Human capital and entrepreneurship..........................................................................................27

    2.5 Summary and implications.........................................................................................................33

    CHAPTER 3: RESEARCH DESIGN ...............................................................................................35

    3.1 Method and research design.......................................................................................................35

    3.2 Data on entrepreneurial activity .................................................................................................36

    3.3 Other datasources .......................................................................................................................37

    3.4 Variable definitions and measures .............................................................................................39

    3.4.1 Dependent variable ....................................................................................................................41

    3.4.2 Indepent variables ............................................................................................................

Recommended

View more >