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Article
Macro Determinants of Formal Entrepreneurship versus Total Entrepreneurship
Journal of Business Venturing (2014)
  • Mai T T Thai, HEC Montreal
  • Ekaterina Turkina, HEC Montreal
Abstract

Based on the eclectic theory of entrepreneurship, this article analyzes macro-level determinants of national rates of formal versus informal entrepreneurship. Our evaluation of the factors identified in this theory reveals a set of empirically-testable, higher-order determinants: economic opportunities, quality of governance, macro-level resources and abilities, performance-based culture and socially-supportive culture. The results of our analysis obtained through the PLS (partial least squares) approach to structural equation modeling contribute to the entrepreneurship literature by providing an empirically-supported model that shows how formal and informal entrepreneurship are driven differently. This model clarifies the conflicting findings in previous research about the effects of socioeconomic, institutional, and cultural factors on entrepreneurship rates across countries. Finally, by showing the effect of each determinant on formal and informal entrepreneurship, this study has important implications for policymakers as well as businesses

Keywords
  • National rates of entrepreneurship,
  • Formal vs. informal,
  • Eclectic theory of entrepreneurship,
  • Macro-determinants
Publication Date
2014
Citation Information
Mai T T Thai and Ekaterina Turkina. "Macro Determinants of Formal Entrepreneurship versus Total Entrepreneurship" Journal of Business Venturing Vol. 29 Iss. 4 (2014)
Available at: http://works.bepress.com/mai_thai/9/