Year: 2017
Type: article
Abstract: Substantial and systematic cross-country variation in entrepreneurship rates has been found in various studies. We attempt to explain such differences focusing on the interaction between institutional factors and population psychological characteristics. Constitutional provisions supporting economic freedom are our measure of the institutional context, whereas we proxy psychological characteristics with a country’s endowment of agency culture. We apply an IV-GMM treatment to deal with endogeneity to a data set comprising 86 countries over the period 2004–2013, and we control for de facto variables and other factors that are likely to influence entrepreneurship. Our results demonstrate that agency culture is indeed an important predictor of entrepreneurship and that this effect is moderated by constitutional provisions supporting economic freedom. In particular, the impact of agency culture on entrepreneurship becomes stronger as a country expands the constitutional protection of economic rights.
Source: Industrial and Corporate Change
DOI: 10.1093/icc/dtx047
Language: English
Subfield: Demography
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2773779485