Linking institutional, economic, technological and cultural context to entrepreneurship in regions of Europe

Researchers and policy makers consider entrepreneurship to be a major source of economic development and competitiveness. Determinants of entrepreneurship have been studied at individual, regional and national levels. Even though research indicates that variation in the levels of entrepreneurship across regions within nations is greater than the national differences and that these differences persist over time (Bosma & Schutjen 2009, 2011; Fritsch & Mueller 2006; Sternberg 2004; Tamásy 2006), we still do not know the full range of regional level determinants of entrepreneurship. I drew from Wennekers’ (2006) framework and link two lines of research (international entrepreneurship and international management) to examine the effects of institutional, economic, technological and cultural contexts on entrepreneurship across within-country regions developed ten hypotheses regarding the relationship of institutional, economic, technological and cultural context to entrepreneurship. I tested these hypotheses within Europe using the regional classification scheme developed by the European Union. Data for the variables came from the European Values Survey, European Social Survey, Eurostat, World Bank, International Social Security Association, Eurobarometer and the Global Competitiveness Report. To test the hypothesized relationships, I use Hierarchical Linear Modeling (HLM 6.0.) The results indicate that there is a positive relationship between institutional trust, Long Term Orientation and entrepreneurship levels across regions. In conclusion, examination of region-level predictors of entrepreneurship must include different measures of entrepreneurship to provide more accurate understanding and to inform policy makers.