1. Institutions and Entrepreneurship: Evidence from GEM-based Research II Workshop on Entrepreneurship Statistics Huelva, 17-18 November 2008 Jolanda Hessels EIM & Erasmus School of Economics André van Stel EIM & University of Amsterdam

2. This presentation 1. Jolanda: background and some examples of GEM-based empirical findings; 2. André: in-depth GEM-based empirical example.

3. Introduction  Institutions as a potential determinant of entrepreneurship;  Empirical testing: comparative data across countries/regions;  Global Entrepreneurship Monitor (GEM);  October 2008: GEM special issue Small Business Economics on entrepreneurship, economic development and institutions.

4. Institutions  Definition: “a set of rules, formal or informal, that actors generally follow, whether for normative, cognitive or material reasons” (North 1990: 3).  Institutions: – enable or constrain economic behavior (North 1990) and economic transactions (Williamson, 1998); – may influence allocation of entrepreneurship across productive/unproductive activities (Baumol 1990).

5. Institutions  Types of institutions, e.g.: – Regulatory framework; – Educational institutions; – Capital market institutions; – Labor market institutions; – Welfare state institutions; – Other businesses.  Subjective/objective measures;  General/entrepreneurship-specific.

6. Institutions  Sources for institutional indicators: – E.g. GCR, WCY, World Bank Doing Business Indicators; – GEM expert questionnaire:  assessment of country’s institutional context with respect to entrepreneurship;  covers various dimensions of a country’s institutional environment for entrepreneurship.

7. Relation institutions - entrepreneurship  Several indicators of entrepreneurship, e.g.: – Stock/flow; – Entrepreneurial process; – Entrepreneurial motivations; – Entrepreneurial aspirations; – Entrepreneurial outcomes.  GEM: possible to assess impact on flow, process, motivations and aspirations;  Relevant to consider level of economic development (Acs, Desai and Hessels, 2008).

8. Relation institutions - entrepreneurship  Considerations when conducting empirical research: – Direct and indirect effects; – Moderating influences; – Correlations between institutional indicators; – Entrepreneurship may also shape institutional envirionment.

9. Evidence GEM-based research  Institutions matter;  Institutional environments affect: – supply of e-ship (Levie and Autio, 2008; Hessels, van Stel, Brouwer and Wennekers, 2008; van Stel, Storey and Thurik, 2007); – supply of ambitious e-ship (Bowen and De Clercq, 2008; Levie and Autio, 2008; Hessels, van Gelderen and Thurik, 2008).  Support for: – direct effects (Bowen and De Clercq, 2008; Hessels, van Stel, Brouwer and Wennekers, 2008; van Stel, Storey and Thurik, 2007); – indirect effects (Levie and Autio, 2008); – moderating effects (Autio and Acs, 2008).  Impact may differ along level of economic development (e.g. Levie and Autio, 2008; De Clercq, Hessels and van Stel, 2008).

10. Examples GEM-based research  Examples of empirical findings: – Post-secondary e-ship education/training relates positively to supply of e-ship and high growth e-ship through opportunity perception in high-income countries (Levie and Autio, 2008) – Financial and educational activities targeted at e-ship relate positively to high growth e-ship; level of corruption negatively (Bowen and De Clercq, 2008); – Taxation and IPR protection moderate relationship between individual’s education and household income with growth aspirations (Autio and Acs, 2008); – Social security negatively relates to supply of e-ship (Wennekers, van Stel, Thurik and Reynolds, 2005; Hessels, van Stel, Brouwer and Wennekers, 2007) and aspiring e-ship (Hessels, van Gelderen and Thurik, 2008); – Outward FDI and international trade positively relate to export- oriented e-ship in high-income countries (De Clercq, Hessels and van Stel, 2008).