Investigation of the Bi-Directional Relationship Between Local Community Culture and Entrepreneurial Activity

Entrepreneurial activity is frequently seen as an important element in local and regional economic growth strategies (van Stel et al., 2005; Wennekers and Thurik, 1999). Studies exploring the determinants of entrepreneurial activity generally find that economic conditions can only explain part of the persistent disparities in entrepreneurship rates between nations, regions or localities (Audretsch and Keilbach, 2004; Freytag and Thurik, 2007). What other studies have suggested is that the differences are at least in part explained by the community cultures (Beugelsdijk and Maseland, 2011; Huggins and Thompson, 2015) and institutions (Huggins and Thompson, 2014) present. According to Hayton et al. (2012) the literature identifies three main ways that culture may influence entrepreneurship: creating more individuals with traits associated with entrepreneurship (Uhlaner and Thurik, 2007); legitimising entrepreneurial activity (Anderson and Smith, 2007; Wennberg et al., 2013); and where a minority seek greater independence from the prevailing culture (Noorderhaven et al., 2004). This study would investigate whether there is evidence of community culture determining the entrepreneurial prevalence rates and attitudes to entrepreneurship across European regions. The study would also look to consider whether there is any evidence that this community culture interacts with policies designed to promote entrepreneurial activity influencing their effectiveness in raising regional/local entrepreneurship rates over time. As such the study would provide insights that would help to inform the development of policy to encourage greater entrepreneurial engagement to achieve higher levels of economic growth.

Following other studies such as Hechavarria and Reynolds (2009) the study would make use of large secondary datasets such as the World Values Survey (WVS) and Eurobarometer surveys to generate measures of community culture. In particular, data sources which allow the evolution of entrepreneurial engagement and culture to be captured through time would be of primary interest to allow the investigation of changes associated with policy evolution. The measures of culture derived would need to be developed based on the existing literature. Econometric analysis would then be used examine the links between community level measures of culture, and potentially measures of institutional quality, such as quality of government (Charron et al., 2014), and individuals’ attitudes towards, preparation for, and engagement with entrepreneurial activities.