Uncertainty avoidance and the rate of business ownership across 21 OECD countries, 1976–2004

By S. Wennekers, Roy Thurik, André van Stel, Niels Noorderhaven. 2006

342 citations recorded by the source corpus.

Persistent differences in the level of business ownership across countries have attracted the attention of scientific as well as political debate. Cultural as well as economic influences are assumed to play a role. This paper deals with the influence of cultural attitudes towards uncertainty on the rate of business ownership across 21 OECD countries. First, the concepts of uncertainty and risk are elaborated, as well as their relevance for entrepreneurship. An occupational choice model is introduced to underpin our reasoning at the macro-level. Second, regression analysis using pooled macro data for 1976, 1990 and 2004 and controlling for several economic variables, yields evidence that uncertainty avoidance is positively correlated with the prevalence of business ownership. According to our model, a restrictive climate of large organizations in high uncertainty avoidance countries pushes individuals striving for autonomy towards self-employment. Regressions for these 3 years separately show that in 2004, this positive correlation is no longer found, indicating that a compensating pull of entrepreneurship in countries with low uncertainty avoidance may have gained momentum in recent years. Third, an interaction term between uncertainty avoidance and GDP per capita in the pooled panel regressions shows that the historical negative relationship between GDP per capita and the level of business ownership is substantially weaker for countries with lower uncertainty avoidance. This suggests that rising opportunity costs of self-employment play a less important role in this cultural environment, or are being compensated by increasing entrepreneurial opportunities.

Subfields: Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/673221cbd293cd5e28bbcbd4321bd653ae14e406

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Management of Technology and Innovation

Citations in the corpus

Entrepreneurial exit and entrepreneurial engagement (2011, background): “Different institutional and regulatory environments provide different incentive structures for entrepreneurship (Freytag and Thurik 2007; Wennekers et al. 2007).”
Exploring the intention–behavior link in student entrepreneurship: Moderating effects of individual and environmental characteristics (2016, background): “This notion is closely related to the inherent feature of entrepreneurse readiness to take risks (Wennekers et al., 2007), a high level of which guides individuals from entrepreneurial intentions towards venture emergence (Van Gelderen, 2010).”
Cross‐Country Determinants of Early‐Stage Necessity and Opportunity‐Motivated Entrepreneurship: Accounting for Model Uncertainty (2018, neutral): “Counter to the conclusions reported above, Wennekers et al. (2007), found that individuals were actually more likely to engage in entrepreneurship, not less, when country level uncertainty avoidance is high.”
Entrepreneurship at Country Level: Economic and Non-Economic Determinants (2006, background): “Wiener (1981) paints a vivid picture of how the Industrial Revolution seems to have caused a strong cultural reorientation.”
Greasing the wheels of entrepreneurship (2007, background): “Wennekers et al. (2007) show that a society’s tolerance for uncertainty and ambiguity increases the rate of self-employment significantly.”
Macro-level determinants of formal entrepreneurship versus informal entrepreneurship (2014, neutral): “Previous empirical studies analyzing the relationship among the components of performance-based culture and formal entrepreneurship (e.g., Naffziger et al., 1994; Wennekers et al., 2007; Wildeman et al., 1999) find that this culture type fosters registered entrepreneurship.”
Greasing the wheels? The impact of regulations and corruption on firm entry (2011, neutral): “Others report that GDP per capita reduces entrepreneurial activity (van Stel et al. 2003; Nooederhaven et al. 2004; Bjørnskov and Foss 2008; Wennekers et al. 2007).”
Relationship between individualist–collectivist culture and entrepreneurial activity: evidence from Global Entrepreneurship Monitor data (2011, background): “All of this, therefore, leads us to coincide with the ideas of Wennekers et al. (2007, p. 148) (although these authors refer to indices of uncertainty avoidance and we refer to the I–C index) when they state ‘‘[o]ur best assessment is that this index can be used for explaining national rates of en”
Entrepreneurship and culture (2010, methodology): “The interpretation of Wennekers, Thurik, Van Stel and Noorderhaven (2007) is that the advent of the entrepreneurial economy (Audretsch and Thurik 2001) has created pull factors mobilizing the relatively abundant supply of potential entrepreneurial capital in countries with low uncertainty avoidance.”
Effectiveness of Transformational Leadership among Different Cultures (2020, neutral): “…(do not like rules), less stress, more tendency to change current job and have risk for entrepreneurial actions, while high level of uncertainty avoidant countries has more structures, rules, hectic, do not like to change job and stress in the daily life (Hofstede, 2009; Wennekers et al., 2007).”
Consequences of cultural practices for entrepreneurial behaviors (2013, neutral): “Wennekers et al. (2007), for example, found uncertainty avoidance to be positively associated with entry into entrepreneurship in a country-level study.”
Uncertainty Avoidance as a Moderator of the Relationship between Perceived Service Quality and Customer Satisfaction (2008, background): “From a macroeconomic standpoint, as services become increasingly important to modern economies (Metters and Marucheck 2007), high uncertainty avoidance may hinder a service business actually being started and, thus, slow down the exploitation of new economic opportunities, especially in the service ”