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SBE Lect 5_ Part 6: ch7 Global entrepreneurship Monitor (Entrepreneurial…
SBE Lect 5_ Part 6: ch7 Global entrepreneurship Monitor
Entrepreneurial Framework Conditions
(examples)
Government Policy
:The extent to which public policies support entrepreneurship:
a)Entrepreneurship as a relevant economic issue
b) Taxes or regulations are either size-neutral or encourage new and SMEs
Physical Infrastructure
Ease of access to physical resources—communication, utilities, transportation, land or space—at a price that does not discriminate against SMEs
Entrepreneurial Finance
The availability of financial resources for (SMEs) (including grants and subsidies (notes: which are size neutral equal chance large to small businesses))
See slide 18-19/26 for the framework conditions
Cultural and social norms
Experts answer: In my country...
The national culture emphasizes self-efficacy, autonomy, and personal initiative
The national culture encourages entrepreneurial risktaking
The national culture encourages creativity and innovation
The national culture emphasizes the responsibility that the individual (rather than the collective) has in managing her own life.
The national culture is highly supportive of individual success achieved through own personal efforts
Five items are summarized in one number (mean)
“The extent to which social and cultural norms encourage or allow actions leading to new business methods or activities that can potentially increase personal wealth and income”
Do individual perceptions correspond with perceptions experts?
The general population is asked:
People consider starting a business a good career choice
People attach high status to successful entrepreneurs
In my country, there is a lot of media attention for entrepreneurs
Hand-out
The Netherlands
USA
Slovenia
Rank-order roughly the same
Why important?
Social norms may influence entry, and entry after exit ◦ High stigma of failure ≈ (serial) entrepreneurship unattractive
Landier (2004): USA = Stigma of Failure low, Europe = Stigma of Failure high
USA: An experimental equilibrium of relatively many start-ups close the technological frontier (many number of trials)
Europe: A conservative equilibrium of a relatively low number of start-ups in low-risk and capital intensive sectors
see video 21/26