Cross-national cultural values and nascent entrepreneurship

Abstract

This article, differentiating between factual and normative values, investigates the links between national culture and entrepreneurial activity in 24 countries based on 154 observations. We test hypotheses on the relationship between national culture—measured by Global Leadership and Organizational Behavior Effectiveness (GLOBE)—and nascent entrepreneurship as represented by Global Entrepreneurship Monitor (GEM). Both the GEM and the GLOBE databases are robust in terms of forming empirical connections between factual and normative culture and entrepreneurship at the country level. Using these two separate databases to examine our hypotheses enables us to avoid the methodological biases that frequently appear in studies where the same respondents provide data for both the independent and the dependent variables. The study demonstrates that the introduction of two different aspects of culture—normative and factual culture—may help resolve the inconsistencies in the literature regarding the links between culture and entrepreneurial activity. This study rekindles an old debate on the role of culture in the social sciences and the need to examine both factual and normative elements. We find that the connection between the normative values of culture and nascent entrepreneurial activity is stronger than the connection between the factual practices of culture and nascent entrepreneurial activity.