AN INVESTIGATION OF DETERMINANTS GLOBAL ENTREPRENEURSHIP : MULTI-COUNTRY PANEL STUDIES

This study examines the validity of governmental supports and policies; and financing for entrepreneurs in the context of global entrepreneurial activities. Our studies are based on the rich datasets of the Global Entrepreneurship Monitor (GEM) database covering 108 countries from 2001 to 2014. In this study, we examine whether countries with more favorable policies and supports towards entrepreneurship and availability of financing for entrepreneurs would result in the higher country’s entrepreneurial activities. We use total early-stage entrepreneurial activity (TEA), a percentage of 18 64 year old population who are either a nascent entrepreneur or an owner manager of a new business, as our dependent variable to represent country’s entrepreneurial activities. There are two main explanatory variables used in the study: governmental supports and financing for entrepreneurs. The governmental supports represents the extent to which public policies support entrepreneurship as a relevant economic issue, while financing for entrepreneurs indicates the availability of financial resources for small and medium enterprises (SMEs) including grants and subsidies. We also include three control variables of basic school entrepreneurial education and training; physical and services infrastructure; and cultural and social norms to test the significance of these factors to the country’s entrepreneurial activities. This study adopts panel regression model augmented with control variables. Our results suggest that there is no evident that government supports and financing for entrepreneurs have significant contribution for country’s entrepreneurial activities. It could be explained that entrepreneurial activities are more flourished in a country that has not set entrepreneurship as relevant economic issues as it might be the case for many emerging countries. The availability of formal financial resources also has a negative contribution to country’s entrepreneurial activities. It could be interpreted that in some countries many new start-ups and entrepreneurs seem to have a greater reliance to informal financing of 4Fs (Founders, Family, Friends and Foolhardy investors) instead of formal channels such as government grant and subsidies, venture capital or strategic partners. We also found that only social and cultural norm values which encourage actions leading to new business and entrepreneurships have a significant contribution in stimulating country’s entrepreneurship activities. However, there is no evident that psychical and services infrastructure; and entrepreneurial education and training at basic school is significantly affecting entrepreneurships in a country.


Introduction
Entrepreneurships and Small and Medium-size Enterprises (SMEs) play a key role in shaping development of a country as they are a source of innovation and economic growth.There are numerous studies documenting the nexus between entrepreneurships and SMEs to the country economic growth (Wennekers & Thurik, 1999;Galindo & Méndez-Picazo, 2013).Wennekers and Thurik (1999)  examples Nigeria (Adebayo & Nassar, 2014), India (Goel & Rishi, 2012), Paraguay (Gallardo & Raufflet, 2014) and Pakistan (Syed et al., 2012).Adebayo and Nassar (2014) 1 show variables used for the study along with the definition and expected sign.

Data
We

Test of Stationarity
We start our analysis with the study of stationarity of our data series.First, the unit root test has been applied to each

The Coefficient of Correlation
After we test stationarity of the data series, we also perform correlation matrices to investigate relationships among explanatory variables.Of the explanatory variables: GOV, FIN, SCHOOL, INFRA and NORM., thus there are total 25 paired correlations.
Overall, the correlation coefficient among explanatory variables is relatively modest, reducing the risk of multicollinearity.

Analysis of Results
We first estimate our panel models for all 108 countries listed in the GEM database.Our aim is to choose the most desired model specifications.Our estimation results are presented in Table 4.

Conclusion
This study examines the validity of of economic growth (rise and fall of nations) and the management literature on large corporate organizations.The studies found that entrepreneurships contribute to economic performance by introducing innovations, creating changes, creating competition and enhancing rivalry.A more recent study of Galindo and Méndez-Picazo (2013) found that innovation playing a central role in the economic growth process and the entrepreneurs are the vehicle to introduce the new technologies to improve the firms' activity and to obtain higher profits.Entrepreneurships have pivotal role in reducing country poverty level particularly in developing countries, for use the latest Global Entrepreneurship Monitor 2014 Global Report (GEM).The report provides the results of the 16th survey cycle held every year since 1999.Number of countries includes in this study is 108 countries.In the 2014 GEM report, 73 countries participated in the survey and the report provides the results on entrepreneurial attributes and activities of 70 of these countries and on entrepreneurship ecosystem of 73 countries.Countries participating in the 2014 GEM survey represent 72.4% of the world's population and 90% of the worlds GDP, thus providing a very significant basis for identifying different features of the entrepreneurship phenomenon.
. The presence of unit roots makes hypothesis test results unreliable; therefore we need the unit root test to examine for the presence of unit roots and to determine appropriate order of difference to obtain the stationery series.The Augmented Dickey-Fuller (ADF) has been applied to test stationarity of our data series.The unit root tests are classified into series with and without unit roots, according to their null hypothesis of being stationary of not.The variable of SCHOOL and INFRA and NORM are not all stationary at their level forms and the ADF tests found the presence of a unit root in the SCHOOL and INFRA.The results of stationery tests are presented in the Table 2.All variables are stationary at first difference.

First
, we estimate a panel model with pooled OLS.We found that the coefficient of SCHOOL and NORM have the correct positive signs as we expect, but only NORM is statistically significant at the 1 per cent level.GOV, FIN and INFRA have negative coefficient and only FIN and INFRA are significant at the level of 1 per cent.It indicates that higher degree of government supports, financing for entrepreneurs and infrastructure seems to be contra-productive for entrepreneurial activities in a country.These results, however, seem inconsistent with the common beliefs.It implies that country with no-specific entrepreneurship program in their national agenda plan; entrepreneurial activities are more thrived as opposed to a country that has set entrepreneurship as a relevant economic issue.For instance in many emerging countries with less government supports for entrepreneurships, new builtups and entrepreneurs are more flourished.The availability of financial resources also has a negative contribution to country's entrepreneurial activities.It could be explained that many new startups have a more reliance to informal financing of 4Fs (Founders, Family, Friends and Foolhardy investors) instead of formal channels such as government grant and subsidies, venture capital or strategic partners.The infrastructure (INFRA) is statistically significant, but with negative sign.It implies that a country with ease access to infrastructure does not necessary having more entrepreneurial activities.There are ample evident that many developing countries with lack of infrastructure have a greater number of new-start up and entrepreneurs.
governmental supports and policies; and financing for entrepreneurs in the context of global entrepreneurial activities.Our studies are based on the rich datasets of the Global Entrepreneurship Monitor (GEM) database covering 108 countries from 2001 to 2014.In this study, might be the case for many emerging countries.The availability of formal financial resources also has a negative contribution to country's entrepreneurial activities.It could be interpreted that in some countries many new start-ups and entrepreneurs seem to have a greater reliance to informal financing of 4Fs (Founders, Family, Friends and Foolhardy investors) instead of formal channels such as government grant and subsidies, venture capital or strategic partners.We also found that only social and cultural norm values which encourage actions leading to new business and training at basic school is significantly affecting entrepreneurships in a country.

Table 1 .
List of variables and its expected sign t = 2001, 2002…2014 TEAit = Total early-stage entrepreneurial activity for a country i at time t FINit = Financing for entrepreneurs for a country i at time t GOit = Governmental supports and policies for a country i at time t Xjit = Control variable of j for a country i at time t, SCHOOLit = Basic school entrepreneurial education and training for a country i at time t.= Error-term.

Table 5 .
Breusch-Pagan and Hausman specification test Source: author's own estimate The result of RE and FE models are presented in the Table 6.The estimation results for the RE model have the expected positive signs for GOV, SCHOOL, and NORM, but negative sign for FIN and INFRA.Only financing for entrepreneurs (FIN) and infrastructure (INFRA) are significant at the level of 1 and 5 per cent respectively.The RE model

Table 6 .
The RE and FE estimation results Source: author's own estimate