An Investigation of Determinants Global Entrepreneurship: Multi-Country Panel Studies

Riznaldi Akbar


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. We favor Random Effect model as opposed to Fixed Effect or Pooled OLS model as Hausman and Breusch–Pagan test suggest. Our results suggest that there is no evident that government supports have significant contribution to country’s entrepreneurial activities.  In other words, 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 is significant to the country’s entrepreneurships, but with a negative sign. 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 i.e. government grant and subsidies, venture capital or strategic partners. A country with cultural and social norms that encourage citizens to new business activities also has greater number of entrepreneurships. However, we found no evident that entrepreneurial education and training at basic school; and ease access to infrastructure are significantly affecting entrepreneurial activities in a country.


Global entrepreneurship monitor; entrepreneurship


Full Text



Adebayo, N. A., & Nassar, M. L. (2014). Impact of micro and small business entrepreneurship on poverty reduction in Ibadan metropolis, South Western Nigeria. International Review of Management and Business Research, 3 (3), 1603-1626.

Audretsch, D. B., Heger, D., & Veith, T. (2015). Infrastructure and entrepreneurship. Small Business Economics, 44 (2), 219-230.

Bae, T. J., Qian, S., Miao, C., & Fiet, J. O. (2014). The Relationship Between Entrepreneurship Education and Entrepreneurial Intentions: A Meta‐Analytic Review. Entrepreneurship Theory and Practice, 38 (2), 217-254.

Bahmani, S., M. A. Galindo, & M. T. Me’ndez. (2012). 'Non Profit Organizations, Entrepreneurship, Social Capital and Economic Growth, Small Business Economics, 38, 271–81.

Bakar, R., Islam, M. A., & Lee, J. (2015). Entrepreneurship education: Experiences in selected countries. International Education Studies, 8 (1), 88-99.

Bygrave, W. D. (2003). Financing entrepreneurs and their businesses. In The Entrepreneurial Advantage of Nations: First Annual Global Entrepreneurship Symposium, United Nations Headquarter.

Gallardo, J., & Raufflet, E. (2014). Extreme poverty alleviation through community-based entrepreneurship: PRODECO in Paraguay, Development in Practice, 24 (1), 140-146.

Goel, G., & Rishi, M. (2012). Promoting entrepreneurship to alleviate poverty in India: An overview of government schemes, private‐sector programs, and initiatives in the citizens sector. Thunderbird International Business Review, 54 (1), 45-57.

Graevenitz, G. V., Harhoff, D., Weber, R. (2010). The effects of entrepreneurship education, Journal of Economic Behaviour and Organization, 76 (1), 90-112.

Gregory, G., Harvie, C., & Lee, H. H. (2002). Korean SMEs in the wake of the financial crisis: strategies, constraints, and performance in a global economy.

Malchow-Møller, N., Schjerning, B., & Sørensen, A. (2011). Entrepreneurship, job creation and wage growth, Small Business Economics, 36 (1), 15-32.

Meek, W.R, Pacheco, D.F., & York,J.G., (2010). The impact of social norms on entrepreneurial action: Evidence from the environmental entrepreneurship context, Journal of Business Venturing, 25 (5), 493-509.

Mensah, S. A., & Benedict, E. (2010). Entrepreneurship training and poverty alleviation: Empowering the poor in the Eastern Free State of South Africa. African Journal of Economic and Management Studies, 1 (2), 138-163.

Miguel-Ángel Galindo, & María-Teresa Méndez-Picazo. (2013). Innovation, entrepreneurship and economic growth. Management Decision, 51 (3), 501-514.

Murdock, K. A. (2012). Entrepreneurship policy: Trade-offs and impact in the EU. Entrepreneurship & Regional Development, 24 (9-10), 879-893.

Stephan, U. (2012). The Influence of Socio-Cultural Environments on the Performance of

Syed, A. A. G., Shah, N., Shaikh, K. H., Ahmadani, M. M., & Shaikh, F. M. (2012). Impact of SMEs on employment in textile industry of Pakistan. Asian Social Science, 8 (4), 131-142.

Cited by

  • There are currently no citations to this article.

Copyright (c) 2016 Riznaldi Akbar

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

favicon Department of Management | Business School | Universitas Pelita Harapan | Indonesia | +62 21 546 0901 |