Agency culture, constitutional provisions and entrepreneurship: a cross-country analysis
Emanuela Carbonara, Enrico Santarelli, Martin Obschonka, Thu Tran Hien, Jeff Potter, Samuel D Gosling
INDUSTRIAL AND CORPORATE CHANGE | OXFORD UNIV PRESS | Published : 2018
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 a..View full abstract
The authors thank Tom Ginsburg for providing us with the data from the Comparative Constitutions Project, Jerg Gutmann and an anonymous reviewer for helpful suggestions. Previous versions of this article have been presented at the Workshop on The Future of Small Business Economics in Utrecht (February 10, 2017), the Midterm Law and Economics Conference in Ghent (February 17, 2017), and the 34th Annual Conference of the European Association of Law and Economics (London, September 14-16, 2017). E.S. gratefully acknowledges financial support from Saarland University within the framework of the program "EXIST-Culture of Entrepreneurship-The Entrepreneurship University" arranged by the German Federal Ministry of Economics and Technology.