The Effects of Cultural Background and Knowledge Creation on Self-Employment and Entry Density Rates

Panagiotis Petrakis and Pantelis Kostis

Review of Economics & Finance, 2013, vol. 3, 18-32

Abstract: This paper contributes to the interpretation of entrepreneurship based on the effect of knowledge and cultural background. Entrepreneurship is defined as both the self-employment and the entry density rates, comparing the two models. The present paper uses a series of variables to express these effects, which are analyzed with a principal component analysis and a regression analysis. The results confirm that cultural background strongly affects both entrepreneurship rates. Knowledge creation does not affect entrepreneurship rates, as its impact on entrepreneurship is long-lasting (it could reach more or less 10 years) and not a short-term one. Simultaneously, knowledge impact affects negatively the self-employment rates and positively the entry density rates in the economies. Furthermore, performing a sensitivity analysis on knowledge and cultural background, the conclusions confirm that cultural background has a strong interpretive role in both entrepreneurship rates. Moreover, under the new prevailing conditions the creation of knowledge and the impact of knowledge have a negative effect on self-employment, while the effect of knowledge impact is strengthened in the cases where we increase knowledge and it is weakened where we decrease the knowledge variables.

Keywords: Cultural background; Entrepreneurship; Entry density; Knowledge; Self-employment (search for similar items in EconPapers)
JEL-codes: D83 L26 Z10 (search for similar items in EconPapers)
Date: 2013
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Related works:
Working Paper: Knowledge and Culture on Entrepreneurship (2012)
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