This paper aims to investigate the interplay between individual- and country-level factors in shaping entrepreneurial growth aspirations.
Using data from the Global Entrepreneurship Monitor (GEM) Adult Population Survey (APS), it uses a multilevel framework to analyse how personal attributes, institutional conditions and the macroeconomic environment influence young businesses (=3.5 years). The study considers two dependent variables: employment growth aspirations (EGA), the expected increase in employment over five years, analysed using a multilevel linear estimator and high-job growth aspirations (HJG), defined as expecting to create at least 20 jobs in 5 years, analysed using a multilevel logistic estimator. The empirical analysis covers 55 countries (2006–2013), distinguishing between innovation- and efficiency-driven economies. Interaction terms examine the moderating effects of financial and social capital on growth aspirations.
Results indicate that education, household income, social networks and perceived skills and opportunities significantly enhance growth aspirations. Institutional factors, such as small-size governments and strong property rights, positively influence entrepreneurial ambitions, while corruption has a detrimental effect. Findings also reveal that the impact of individual and institutional factors varies by a country’s economic development stage. Institutional quality plays a stronger role in innovation-driven economies, whereas financial and social capital are more influential in efficiency-driven economies.
The findings highlight the need for tailored policy interventions to foster entrepreneurial growth in different economic contexts. Policies should consider the economic development stage of a country, focusing on strengthening institutional dimensions in innovation-driven economies and enhancing financial and social capital in efficiency-driven economies.
The study provides novel insights with regard to the impact of institutional and individual factors on entrepreneurial growth aspirations across different economic contexts. By using the multilevel estimation technique and taking into account the stages of economic development, the paper offers valuable implications for policymakers aiming to foster entrepreneurial ecosystems.
