Small Business Economics

, Volume 37, Issue 1, pp 23–37 | Cite as

Relationship between individualist–collectivist culture and entrepreneurial activity: evidence from Global Entrepreneurship Monitor data

  • María-José Pinillos
  • Luisa Reyes


This paper examines how one dimension of national culture (an individualist–collectivist orientation) is related to Total Entrepreneurial Activity, depending on the level of economic development, measured by GDP per capita. Researchers have traditionally associated individualism with high rates of firm creation, arguing that an orientation towards achievement and the pursuit of personal objectives (dominant aspects in individualist cultures) are determinants of entrepreneurial activity. The current analysis shows that a country’s culture correlates to entrepreneurship, but cannot uphold the idea that higher levels of individualism mean higher rates of entrepreneurship. Using data from the Global Entrepreneurship Monitor on 52 countries, the results show that a country’s entrepreneurship rate is negatively related to individualism when development is medium or low, and positively related to individualism when the level of development is high. Thus, individualism is not related to entrepreneurship in the same way in countries with differing levels of development.


Culture Individualism–collectivism Entrepreneurship Global Entrepreneurship Monitor 

JEL Classifications

L26 M13 O57 


  1. Acs, Z. J., Audretsch, D. B., & Evans, D. E. (1994). The determinants of variations in self-employment rates across countries over time. Discussion paper 871. Center for Economic Policy Research, London.Google Scholar
  2. Acs, Z. J., Arenius, P., Hay, M., & Minniti, M. (2005). GEM, global entrepreneurship monitor, 2004 executive report. Babson Park, MA, USA and London, UK: Babson College and London Business School.Google Scholar
  3. Allison, P. D. (1977). Testing for interaction in multiple regression. American Journal of Sociology, 83(1), 144–153.CrossRefGoogle Scholar
  4. Audretsch, D. B., Thurik, A. R., Verheul, I., & Wennekers, A. R. M. (Eds.). (2002). Entrepreneurship: Determinants and policy in a European-US comparison. Boston/Dordrecht: Kluwer Academic Publishers.Google Scholar
  5. Baron, R. M., & Kenny, D. A. (1986). The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173–1182.CrossRefGoogle Scholar
  6. Baum, J. R., Olian, J. D., Erez, M., Schnell, E. R., Smith, K. G., Sims, H. P., et al. (1993). Nationality and work role interactions: A cultural contrast of Israeli and U.S. entrepreneurs’ versus managers’ needs. Journal of Business Venturing, 8(6), 499–512.CrossRefGoogle Scholar
  7. Baumol, W. J. (1996). Entrepreneurship: Productive, unproductive, and destructive. Journal of Business Venturing, 11(1), 3–22.CrossRefGoogle Scholar
  8. Blanchflower, D. G. (2000). Self-employment in OECD Countries. Labour Economics, 7(5), 471–505.CrossRefGoogle Scholar
  9. Blanchflower, D. G., & Oswald, A. J. (1994). The wage curve. Cambridge, MA: MIT.Google Scholar
  10. Blau, D. (1987). A time series analysis of self-employment. Journal of Political Economy, 95(3), 445–467.CrossRefGoogle Scholar
  11. Bond, R., & Smith, P. B. (1996). Culture and conformity: A meta-analysis of studies using Asch’s (1952b, 1956) line judgment task. Psychological Bulletin, 119(1), 111–137.CrossRefGoogle Scholar
  12. Bosma, N., & Harding, R. (2007). GEM, global entrepreneurship monitor, 2006, executive report. Babson Park, MA, USA and London, UK: Babson College and London Business School.Google Scholar
  13. Carree, M., Van Stel, A., Thurik, R., & Wennekers, S. (2002). Economic development and business ownership: An analysis using data of 23 OECD countries in the period of 1976–1996. Small Business Economics, 19(3), 271–290.CrossRefGoogle Scholar
  14. Davidson, P., & Wiklund, J. (1997). Values, beliefs and regional variations in new firm formation rates. Journal of Economic Psychology, 18(2–3), 179–199.CrossRefGoogle Scholar
  15. Davidsson, P. (1995). Culture, structure and regional levels of entrepreneurship. Entrepreneurship & Regional Development, 7, 41–62.CrossRefGoogle Scholar
  16. Earley, P. C., & Gibson, C. B. (1998). Taking stock in our progress on individualism–collectivism: 100 years of solidarity and community. Journal of Management, 24(3), 265–304.CrossRefGoogle Scholar
  17. Erez, M., & Earley, P. C. (1993). Culture, self-identity and work. New York: Oxford University Press.Google Scholar
  18. Evans, D. S., & Leighton, L. S. (1989). The determinants of changes in US self-employment, 1968-1987. Small Business Economics, 1(2), 111–119.CrossRefGoogle Scholar
  19. Franke, R. H., Hofstede, G., & Bon, M. H. (1991). Cultural roots of economic performance: A research note. Strategic Management Journal, 12(S1), 165–173.CrossRefGoogle Scholar
  20. Ghauri, P., Gronhaug, K., & Kristianslund, I. (1995). Research methods in business studies. London: Prentice Hall.Google Scholar
  21. Hair, J. F., Anderson, R. E., Tatham, R. L., & Black, W. C. (1998). Multivariate data analysis (5th ed.). Upper Saddle River, NJ: Prentice Hall.Google Scholar
  22. Hayton, J. C., George, G., & Zahra, S. A. (2002). National culture and entrepreneurship: A review of behavioral research. Entrepreneurship Theory and Practice, 26(4), 33–52.Google Scholar
  23. Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. Beverly Hills, CA: Sage Publications.Google Scholar
  24. Hofstede, G. (1991). Cultures and organizations: Software of the mind. London, UK: McGraw Hill.Google Scholar
  25. Hofstede, G. (2001). Culture’s consequences (2nd ed.). Thousand Oaks: Sage Publications.Google Scholar
  26. Hofstede, G. (2006). What did GLOBE really measure? Researchers’ minds versus respondents’ minds. Journal of International Business Studies, 37(6), 882–896.CrossRefGoogle Scholar
  27. Hofstede, G., Noorderhaven, N. G., Thurik, A. R., Uhlaner, L. M., Wennekers, A. R. M., & Wildeman, R. E. (2004). Culture’s role in entrepreneurship: Self-employment out of dissatisfaction. In J. Ulijn & T. Brown (Eds.), Innovation, entrepreneurship and culture: The interaction between technology, progress and economic growth (pp. 162–203). Cheltenham, UK: Edward Elgar.Google Scholar
  28. Hui, C. H., & Triandis, H. C. (1986). Individualism-collectivism: A study of cross-cultural researchers. Journal of Cross-Cultural Psychology, 17(2), 225–248.CrossRefGoogle Scholar
  29. Hunt, S., & Levie, J. (2003). Culture as a predictor of entrepreneurial activity. In W. D. Bygrave (Ed.), Frontiers of entrepreneurship research 2003 (pp. 171–185). Wellesley, MA: Babson College.Google Scholar
  30. Inglehart, R. (1997). Modernization and postmodernization. Princeton, NJ: Princeton University Press.Google Scholar
  31. Inglehart, R., & Baker, W. E. (2000). Modernization, cultural change, and the persistence of traditional values. American Sociological Review, 65(1), 19–51.CrossRefGoogle Scholar
  32. Inglehart, R., & Welzel, C. (2005). Modernization, cultural change and democracy: The human development sequence. Cambridge: Cambridge University Press.Google Scholar
  33. Kirkman, L. B., Lowe, K. B., & Gibson, C. B. (2006). A quarter century of culture’s consequences: A review of empirical research incorporating Hofstede’s cultural values framework. Journal of International Business Studies, 37, 285–320.CrossRefGoogle Scholar
  34. Kluckhohn, C. (1951). The study of culture. In D. Lerner & H. D. Lasswell (Eds.), The policy sciences (pp. 86–101). Stanford, CA: Stanford University Press.Google Scholar
  35. Kroeber, A. L., & Parsons, T. (1958). The concepts of culture and of social system. American Sociological Review, 23(5), 582–590.Google Scholar
  36. Locke, E. A., & Latham, G. P. (1990). A theory of goal setting and task performance. Englewood Cliffs, NJ: Prentice-Hall.Google Scholar
  37. Maslow, A. (1954). Motivation and personality. New York: Harper.Google Scholar
  38. McGrath, R. G., MacMillan, I. C., & Scheinberg, S. (1992a). Elitists, risk-takers, and rugged individualists? An exploratory analysis of cultural differences between entrepreneurs and non-entrepreneurs. Journal of Business Venturing, 7(2), 115–135.CrossRefGoogle Scholar
  39. McGrath, R. G., MacMillan, I. C., Yang, E. A., & Tsai, W. (1992b). Does culture endure, or is it malleable? Journal of Business Venturing, 7(6), 441–458.CrossRefGoogle Scholar
  40. Meager, N. (1992). Does unemployment lead to self-employment? Small Business Economics, 4(2), 87–103.CrossRefGoogle Scholar
  41. Minniti, M., Bygrave, W. D., & Autio, E. (2006). GEM, global entrepreneurship monitor, 2005, executive report. Babson Park, MA, US and London, UK: Babson College and London Business School.Google Scholar
  42. Morris, M. H., Davis, D. L., & Allene, J. W. (1994). Fostering corporate entrepreneurship: Cross-cultural comparisons of the importance of individualism versus collectivism. Journal of International Business Studies, 25(1), 65–89.CrossRefGoogle Scholar
  43. Mueller, S. L., & Thomas, A. S. (2001). Culture and entrepreneurial potential: A nine country study of locus of control and innovativeness. Journal of Business Venturing, 16(1), 51–75.CrossRefGoogle Scholar
  44. Noorderhaven, N., Thurik, R., Wennekers, S., & van Stel, A. (2004). The role of dissatisfaction and per capita income in explaining self-employment across 15 European countries. Entrepreneurship Theory & Practice, 28, 447–466.CrossRefGoogle Scholar
  45. Oyserman, D., Coon, H. M., & Kemmelmeier, M. (2002). Rethinking individualism and collectivism: Evaluation of theoretical assumptions and meta-analyses. Psychological Bulletin, 128(1), 3–72.CrossRefGoogle Scholar
  46. Peterson, R. (1988). Understanding and encouraging entrepreneurship internationally. Journal of Small Business Management, 26(2), 1–7.Google Scholar
  47. Reynolds, P. D., Bygrave, W. D., Autio, E., Cox, L. W., & Hay, M. (2002). GEM, global entrepreneurship monitor, 2002, executive report. Wellesley, MA: Babson College.Google Scholar
  48. Schepers, D. H. (2006). Three proposed perspectives of attitude toward business’ ethical responsibilities and their implications for cultural comparison. Business and Society Review, 111(1), 15–36.CrossRefGoogle Scholar
  49. Schimmack, U., Oishi, S., & Diener, E. (2005). Individualism: A valid e important dimension of cultural differences between nations. Personality and Social Psychology Review, 9(1), 17–31.CrossRefGoogle Scholar
  50. Shane, S. (1992). Why do some societies invent more than others? Journal of Business Venturing, 7(1), 29–46.CrossRefGoogle Scholar
  51. Shane, S. (1993). Cultural influences on national rates of innovation. Journal of Business Venturing, 8(1), 59–73.CrossRefGoogle Scholar
  52. Sharma, S., Durand, R. M., & Gur-Arie, O. (1981). Identification and analysis of moderator variables. Journal of Marketing Research, 18, 291–300.CrossRefGoogle Scholar
  53. Sondergaard, M. (1994). Research note: Hofstede’s consequences: A study of reviews, citations and replications. Organization Studies, 15(3), 447–456.CrossRefGoogle Scholar
  54. Southwood, K. E. (1978). Substantive theory and statistical interaction: Five models. The American Journal of Sociology, 83(5), 1154–1203.CrossRefGoogle Scholar
  55. Sternberg, R., & Wennekers, S. (2005). Determinants and effects of new business creation using global entrepreneurship monitor data. Small Business Economics, 24(3), 193–203.CrossRefGoogle Scholar
  56. Stewart, W. H., & Roth, P. L. (2007). A meta-analysis of achievement motivation differences between entrepreneurs and managers. Journal of Small Business Management, 45(4), 401–421.CrossRefGoogle Scholar
  57. Tang, L., & Koveos, P. E. (2008). A framework to update Hofstede’s cultural value indices: Economic dynamics and institutional stability. Journal of International Business Studies, 39(6), 1045–1063.CrossRefGoogle Scholar
  58. Thomas, A. S., & Mueller, S. L. (2000). A case for comparative entrepreneurship: Assessing the relevance of culture. Journal of International Business Studies, 31(2), 287–301.CrossRefGoogle Scholar
  59. Thurik, A. R., & Wennekers, S. (2004). Entrepreneurship, small business and economic growth. Journal of Small Business and Enterprise Development, 11(1), 140–149.CrossRefGoogle Scholar
  60. Tiessen, J. H. (1997). Individualism, collectivism, and entrepreneurship: A framework for international comparative research. Journal of Business Venturing, 12(5), 367–384.CrossRefGoogle Scholar
  61. Tödtling, F., & Wanzenböck, H. (2003). Regional differences in structural characteristics of start-ups. Entrepreneurship & Regional Development, 15(4), 351–370.CrossRefGoogle Scholar
  62. Triandis, H. C. (1988). Collectivism vs. individualism: A reconceptualization of a basic concept in cross-cultural social psychology. In G. K. Verma & Y. C. Bagley (Eds.), Cross-cultural studies of personality, attitudes, and cognition (pp. 60–95). London: Macmillan.Google Scholar
  63. Triandis, H. C. (1995). Individualism and collectivism. Boulder, CO: Westview Press.Google Scholar
  64. Triandis, H. C., & Suh, E. M. (2002). Cultural influences on personality. Annual Review of Psychology, 53(1), 133–160.CrossRefGoogle Scholar
  65. Trulsson, P. (1997). Strategies of entrepreneurship: Understanding industrial entrepreneurship and structural change in northwest Tanzania. Linköping, Sweden: Linköping University.Google Scholar
  66. Uhlaner, L., & Thurik, R. (2007). Postmaterialism influencing total entrepreneurial activity across nations. Journal of Evolutionary Economics, 17(2), 161–185.CrossRefGoogle Scholar
  67. Van Stel, A., Carree, M., & Thurik, R. (2005). The effect of entrepreneurial activity on national economic growth. Small Business Economics, 24(3), 311–321.CrossRefGoogle Scholar
  68. Vandello, J. A., & Cohen, D. (1999). Patterns of individualism and collectivism across the United States. Journal of Personality and Social Psychology, 77(2), 279–292.CrossRefGoogle Scholar
  69. Venkatraman, N. (1989). The concept of fit in strategy research: Toward verbal and statistical correspondence. Academy of Management Review, 14(3), 423–444.Google Scholar
  70. Wennekers, S., Noorderhaven, N., Hofstede, G., & Thurik, R. (2002). Cultural and economic determinants of business ownership across countries. In W. D. Bygrave, E. Autio, C. G. Brush, P. Davidsson, P. G. Greene, P. D. Reynolds, & H. J. Sapienza (Eds.), Frontiers of entrepreneurship research 2002 (pp. 179–190). Wellesley, MA: Babson College.Google Scholar
  71. Wennekers, S., van Stel, A., Thurik, R., & Reynolds, P. (2005). Nascent entrepreneurship and the level of economic development. Small Business Economics, 24(3), 293–309.CrossRefGoogle Scholar
  72. Wennekers, S., Thurik, R., van Stel, A., & Noorderhaven, N. (2007). Uncertainty avoidance and the rate of business ownership across 21 OECD countries, 1976–2004. Journal of Evolutionary Economics, 17(2), 133–160.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC. 2009

Authors and Affiliations

  1. 1.Rey Juan Carlos UniversityMadridSpain

Personalised recommendations