Introduction
Background and hypotheses
Entrepreneurial aspirations and motivations
Entrepreneurial aspirations and social security
Methodology and data
Dependent variables: entrepreneurial aspirations
Independent variables: entrepreneurial motivations and social security
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Necessity motive. The share of early-stage entrepreneurs that indicate to participate primarily in entrepreneurial activity because they have no other options for work.
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Independence motive. The share of early-stage entrepreneurs for which independence is the main motive for becoming an entrepreneur.
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Increase wealth motive. The share of early-stage entrepreneurs that indicate that their prime motive for being or becoming an entrepreneur is to increase wealth.The three motives that we distinguish are mutually exclusive. However, they do not add up to 100% since people may also have other motives for becoming self-employed such as challenge or recognition (see also “Background and hypotheses”).For social security we take the following indicator:
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Social security contribution rate. This is the total (employer’s and employees’) compulsory social security contribution rate for the year 2004 taken from the World Competitiveness Yearbook 2005 (WCY).
Control variables
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GDP per capita. We measure level of economic development by means of GDP per capita. Gross national income per capita is expressed in purchasing power parities per US $ for 2005. These data are taken from the World Development Indicators database of the World Bank.
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% Population 25–44 years. This variable refers to the percentage of people aged 25 to 44 years in the total population for the year 2005. Data are taken from the US Bureau of the Census.
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Value added in services (% of GDP). We use data on value added in services from the World Development Indicators database of the World Bank. Value added is the net output of the sector after adding up all outputs and subtracting intermediate inputs.
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GDP growth. Data on GDP Growth for 2005 are taken from the World Economic Outlook Database from the International Monetary Fund (IMF).
Innovation | Job growth | Export orientation | ||||
---|---|---|---|---|---|---|
New technology rate | New product rate | Medium job growth rate | High job growth rate | Export rate | Substantial export rate | |
Argentina | 1.56 | 2.22 | 3.57 | 1.33 | 2.20 | 0.83 |
Australia | 1.15 | 1.27 | 2.65 | 1.04 | 3.35 | 1.38 |
Austria | 0.32 | 0.51 | 1.58 | 0.63 | 3.22 | 1.14 |
Belgium | 2.33 | 0.43 | 0.81 | 0.19 | 2.27 | 0.90 |
Brazil | 1.54 | 0.53 | 2.24 | 0.43 | 2.09 | 0.26 |
Canada | 0.99 | 1.34 | 3.87 | 1.65 | 6.96 | 2.36 |
Chile | 9.62 | 3.29 | 5.03 | 1.78 | – | – |
Denmark | 0.31 | 1.00 | 1.28 | 0.72 | 2.52 | 0.74 |
Finland | 0.82 | 0.67 | 0.82 | 0.10 | 1.66 | 0.40 |
France | 1.22 | 0.17 | 0.90 | 0.38 | 3.96 | 1.54 |
Germany | 0.57 | 0.53 | 1.31 | 0.79 | 4.29 | 0.71 |
Greece | 3.05 | 0.38 | 1.54 | 0.84 | 3.30 | 1.41 |
Hungary | 0.62 | 0.12 | 0.33 | 0.25 | 0.76 | 0.29 |
Iceland | 1.45 | 1.36 | 3.90 | 1.22 | 7.15 | 2.45 |
Ireland | 1.23 | 1.33 | 2.81 | 0.98 | 5.41 | 1.58 |
Italy | 0.37 | 0.33 | 1.13 | 0.39 | 2.44 | 0.80 |
Japan | 0.26 | 0.00 | 0.89 | 0.17 | 0.96 | 0.06 |
Mexico | 1.92 | 0.69 | 0.95 | 0.11 | 1.24 | 0.21 |
Netherlands | 0.47 | 0.79 | 1.04 | 0.26 | 2.09 | 0.88 |
New Zealand | 1.73 | 3.17 | 4.67 | 1.66 | 10.89 | 1.84 |
Norway | 2.54 | 1.75 | 2.29 | 0.74 | 5.31 | 1.89 |
Slovenia | 0.53 | 0.65 | 1.60 | 0.80 | 2.80 | 1.31 |
South Africa | 1.98 | 0.82 | 0.76 | 0.17 | 2.56 | 1.38 |
Spain | 0.11 | 0.86 | 1.24 | 0.18 | 1.92 | 1.00 |
Sweden | 0.36 | 0.31 | 1.10 | 0.49 | 1.36 | 0.42 |
Thailand | 5.05 | 4.33 | 4.87 | 2.02 | 4.35 | 1.61 |
United Kingdom | 1.14 | 0.78 | 2.13 | 0.87 | 2.96 | 1.11 |
United States | 1.80 | 1.75 | 4.86 | 1.47 | 9.28 | 2.59 |
Venezuela | 7.55 | 2.80 | 8.29 | 2.01 | 5.61 | 1.80 |
Mean | 1.81 | 1.18 | 2.36 | 0.82 | 3.68 | 1.17 |
Necessity motive (%) | Independence motive (%) | Increase wealth motive (%) | |
---|---|---|---|
Argentina | 30 | 25 | 19 |
Australia | 12 | 57 | 11 |
Austria | 14 | 49 | 23 |
Belgium | 10 | 35 | 13 |
Brazil | 47 | 18 | 24 |
Canada | 13 | 34 | 27 |
Chile | 26 | 28 | 42 |
Denmark | 3 | 49 | 16 |
Finland | 12 | 42 | 15 |
France | 39 | 24 | 10 |
Germany | 29 | 38 | 13 |
Greece | 14 | 32 | 42 |
Hungary | 39 | 28 | 23 |
Iceland | 5 | 49 | 20 |
Ireland | 19 | 43 | 22 |
Italy | 16 | 31 | 35 |
Japan | 19 | 57 | 21 |
Mexico | 16 | 19 | 30 |
Netherlands | 8 | 46 | 12 |
New Zealand | 7 | 52 | 26 |
Norway | 9 | 43 | 20 |
Slovenia | 11 | 45 | 30 |
South Africa | 39 | 33 | 11 |
Spain | 14 | 44 | 27 |
Sweden | 14 | 40 | 23 |
Thailand | 24 | 29 | 26 |
United Kingdom | 11 | 39 | 15 |
United States | 12 | 35 | 35 |
Venezuela | 38 | 25 | 31 |
Mean | 19 | 38 | 23 |
Empirical analysis
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
1. New technology rate | ||||||||||||||
2. New product rate | 0.701*** | |||||||||||||
3. Medium job growth rate | 0.697*** | 0.826*** | ||||||||||||
4. High job growth rate | 0.621*** | 0.851*** | 0.920*** | |||||||||||
5. Export rate | 0.295 | 0.594*** | 0.696*** | 0.730*** | ||||||||||
6. Substantial export rate | 0.369* | 0.529*** | 0.650*** | 0.699*** | 0.848*** | |||||||||
7. Necessity motive | 0.287 | 0.007 | 0.088 | −0.012 | −0.234 | −0.237 | ||||||||
8. Independence motive | −0.412** | −0.108 | −0.152 | −0.076 | 0.175 | 0.131 | −0.677*** | |||||||
9. Increase wealth motive | 0.476*** | 0.297 | 0.403** | 0.391** | 0.222 | 0.190 | −0.037 | −0.303 | ||||||
10. GDP capita | −0.520*** | −0.323* | −0.243 | −0.157 | 0.307 | 0.314 | −0.647*** | 0.650*** | −0.281 | |||||
11. Social security contribution rate | −0.236 | −0.482*** | −0.416** | −0.422** | −0.414** | −0.376** | 0.219 | −0.315* | 0.123 | −0.007 | ||||
12. % Population aged 25–44 years | −0.184 | −0.023 | −0.060 | 0.096 | 0.147 | 0.183 | −0.391** | 0.289 | 0.138 | 0.348* | 0.310 | |||
13. Value added in services (% of GDP) | −0.521*** | −0.568*** | −0.435** | −0.421** | −0.136 | −0.196 | −0.180 | 0.098 | −0.262 | 0.278 | 0.276 | −0.042 | ||
14. GDP growth | 0.595*** | 0.645*** | 0.572*** | 0.548*** | 0.214 | 0.357 | 0.230 | −0.367* | 0.325* | −0.454** | −0.408** | −0.385** | −0.577*** | |
Mean | 1.813 | 1.178 | 2.361 | 0.816 | 3.675 | 1.174 | 0.190 | 0.376 | 0.228 | 0.258 | 0.317 | 28.859 | 64.942 | 3.252 |
Standard deviation | 2.160 | 1.062 | 1.839 | 0.601 | 2.479 | 0.689 | 0.119 | 0.107 | 0.089 | 0.107 | 0.234 | 1.969 | 6.124 | 1.443 |
Observations | 29 | 29 | 29 | 29 | 28 | 28 | 29 | 29 | 29 | 29 | 29 | 29 | 29 | 29 |
Dependent variables: entrepreneurial aspirations | ||||||
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Innovation | Job growth | Export orientationa
| ||||
New technology rate | New product rate | Medium job growth rate | High job growth rate | Export rate | Substantial export rate | |
Constant | 7.492 (0.677) | −1.026 (−0.198) | −8.149 (−0.816) | −5.091 (−1.655) | −20.089 (−1.462) | −7.138* (−2.024) |
Necessity motive | 0.856 (0.181) | −0.827 (−0.373) | 4.481 (1.051) | 1.438 (1.095) | 8.174 (1.393) | 1.983 (1.317) |
Independence motive | −3.994 (−0.757) | −0.528 (−0.214) | −0.273 (−0.057) | −0.051 (−0.035) | −2.125 (−0.324) | −0.690 (−0.410) |
Increase wealth motive | 7.306 (1.615) | 0.623 (0.294) | 7.345* (1.801) | 2.090 (1.664) | 11.680* (1.981) | 2.125 (1.404) |
Soc. security contribution rate | −2.239 (−1.138) | −1.655* (−1.797) | −3.657** (−2.062) | −1.285** (−2.352) | −6.672** (−2.755) | −1.395** (−2.245) |
GDP capita | −3.404 (−0.728) | −2.055 (−0.938) | 2.083 (0.494) | 0.812 (0.625) | 14.552** (2.526) | 4.341*** (2.935) |
% Population 25–44 years | 0.017 (0.077) | 0.151 (1.451) | 0.234 (1.164) | 0.140** (2.268) | 0.445 (1.574) | 0.157** (2.228) |
Value added in services | −0.084 (−1.133) | −0.029 (−0.826) | 0.007 (0.107) | 0.010 (0.504) | 0.075 (0.820) | 0.025 (1.050) |
GDP growth | 0.161 (0.430) | 0.295* (1.681) | 0.458 (1.354) | 0.199* (1.911) | 0.445 (0.941) | 0.285** (2.348) |
R2 (adjusted) | 0.395 | 0.452 | 0.322 | 0.396 | 0.304 | 0.407 |
Observations | 29 | 29 | 29 | 29 | 28 | 28 |