Linking National Culture to Domestic Entrepreneurial Activity

Diploma Thesis from the year 2008 in the subject Sociology - Individual, Groups, Society, grade: 1,3, LMU Munich (Fakultät für Betriebswirtschaft), course: ABWL, language: English, abstract: In September 2006, the OECD launched a major initiative dedicated to establishing internationally comparable statistics on entrepreneurship and its determinants (OECD 2006). This highlights the importance of several aspects. 1. The impact of entrepreneurial activity in societies is manifold and critical to the economical success of nations. 2. The role of entrepreneurship is becoming increasingly significant with regard to the development of international businesses in a global market environment. 3. From a scientific point of view, entrepreneurship is gaining evermore attention from scholars of various disciplines. As A review of literature suggests, various socio-cultural elements determine entrepreneurial activity across countries. Yet, in spite of its economic and social significance, domestic venture creation rates - in international comparison - vary significantly. Relying on the definition of entrepreneurship as the 'creation of new enterprise' (Low & MacMillan 1988, p.141) this thesis assesses the various linkages between national culture and domestic entrepreneurial activity. At first, a recap of historical entrepreneurship theory leads to the identification of some fundamental aspects. At the same time, it is found that individual-level factors play a central role. These personal factors are then examined further, relying on entrepreneurial psychology theory and deriving a set of cross-nationally valid socio-cultural antecedents to entrepreneurial activity. Incorporating an anthropological perspective, a subsequent analysis of recent empirical findings examines the impact of differences in national cultural values on domestic entrepreneurial activity. Accordingly, domestic entrepreneurial activity may be influenced by national culture through direct as well as moderating effects, represented by the impact by differences in national cultural values on entrepreneurial orientation as well as on entrepreneurial cognition (Mueller & Thomas 2000; Thomas & Mueller 2000; Mitchell et al. 2000, 2002). Eventually, findings are integrated to a common theoretical framework that draws a holistic picture of the various associations between national culture and domestic entrepreneurial activity. The generated model allows some valuable implications for academia to further research the complex interaction between national culture and the various phenomena of entrepreneurial activity.