Understanding regional variation in entrepreneurial activity and entrepreneurial attitude in Europe

Abstract

Differences in entrepreneurial activity and entrepreneurial attitude are substantial and persistent across nations and regions. However, studies on entrepreneurship that encompass regions and countries at the same time are lacking. This paper explains both national and regional differences in entrepreneurial attitude and activity for 127 regions in 17 European countries, based on Global Entrepreneurship Monitor (GEM) data. We reveal the importance of institutional factors and economic and demographic attributes to variations in regional entrepreneurial attitude and activity. Our findings point at the relevance of distinguishing between components of entrepreneurial attitudes, i.e. fear of failure in starting business, perceptions on start-up opportunities and self-assessment of personal capabilities to start a firm. We find different determinants of these components, suggesting that they reflect different aspects of entrepreneurial attitude. In explaining regional prevalence rates of phases in entrepreneurial activity (nascent, baby business, established business) we find significant contributions of entrepreneurial attitude components. Urban regions and regions with high levels of nearby start-up examples show relatively high rates of early-stage entrepreneurship. A large number of start-up procedures does not discourage early-stage entrepreneurship.