Country-level entrepreneurship: Crowding out the population’s need for autonomy

Abstract

Purpose and problem: Governments through their policy support of new and growing enterprises continue to emphasise economic incentives as if most members of the population prioritise material gain. This article argues that high levels of government policy support for new and growing enterprises crowd out the population’s need for autonomy when potential entrepreneurs perceive government to be controlling.

Methodology: The researchers constructed a country-level panel data set based on the Global Entrepreneurship Monitor, World Bank Group Entrepreneurship Survey, the World Economic Forum competitiveness reports and the International Monetary Fund data base for 44 countries over the period 2000 to 2007. Since we relied on eight years of secondary data, we applied panel analysis to the regressions. We used multiple regression to model the moderating effects of government policy support on the autonomy-entrepreneurship relationship.

Findings: The findings show that government policy support tends to buffer the effect of autonomy on entrepreneurship, lending support to the article’s argument.

Implications: This research has tested one of the most important anomalies in economics on entrepreneurship data: that ‘crowding out’ might reverse the most fundamental economic law, namely that raising economic incentives increases the supply of entrepreneurship.