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Spring 2012

ISSN 0890-913X

Volume 27, Number 2

Categories: Economics | Spring 2012

Praise and Profits: Cultural and Institutional Determinants of Entrepreneurship

Benjamin Powell, Texas Tech University

Cortney Stephen Rodet, Florida State University

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TheJournalofPrivateEnterprise27(2),2012,19–42PraiseandProfits:CulturalandInstitutionalDeterminantsofEntrepreneurshipBenjaminPowell*SuffolkUniversityCortneyStephenRodetFloridaStateUniversityAbstractWeusedatafromtheWorldValuesSurvey,theGlobalEntrepreneurshipMonitor,andtheEconomicFreedomoftheWorldAnnualReporttoempiricallyexaminetheimpactthateconomicfreedomandsocietalapprovalofentrepreneurshaveonratesofearlystageentrepreneurship.Wefindthatbothsocialapprovalandeconomicfreedom,specificallyfreedomfrombiggovernment,isassociatedwithincreasedratesofentrepreneurshipinacrosssectionof21countries.JELCodes:L26,M13,O10,P48,Z10Keywords:Entrepreneurship;Economicfreedom;CultureI.IntroductionEntrepreneursplayacrucialroleinpromotingeconomicdevelopment.Theydrivenewinnovation(Schumpeter,1934)andthemarket’sprocesstowardequilibration(Kirzner,1973).However,thewidevariationinefficiencyandgrowthincountriesaroundtheworldillustratesthatentrepreneurshipisn’tuniversallyproductive.Baumol(1990)arguesthatentrepreneursareomnipresentbutvaryinhowproductivetheyareonthebasisoftheirinstitutionalenvironment.Whenprofitscanbemadethroughlobbyingorotherparticipationinthepoliticalarena,entrepreneurswillbeattractedtounproductiveordestructiveactivities.Whenprofitsaremorereadilyavailablebyservingconsumersthroughenhancingefficiencyorcreatingnewproducts,entrepreneurshipwillbemoreproductive.*WethankClaudiaWilliamson,theparticipantsattheBrunoLeoniInstitute’sMisesSeminarinSestriLevanteandtheAssociationofPrivateEnterpriseEducationmeetinginLasVegas,twoanonymousreferees,andtheeditorforhelpfulcommentsonearlierdrafts.WealsothanktheCharlesG.KochCharitableFoundationforfinancialsupport.19

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Metadata [hide]

Title	Praise and Profits: Cultural and Institutional Determinants of Entrepreneurship
Authors/Creators:	Benjamin Powell, Texas Tech University Cortney Stephen Rodet, Florida State University
Year:	2012
Volume:	27
Number:	2
Pages:	19 - 42
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	Entrepreneurship, economic freedom, culture, Kirzner, equilibrium, profit, praise, role of government

Citation:
Powell, Benjamin; Rodet, Cortney Stephen / 2012. "Praise and Profits: Cultural and Institutional Determinants of Entrepreneurship." The Journal of Private Enterprise, 27(2): 19-42.