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Start-up rates and innovation: A cross-country examination

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Abstract

Despite the widespread assumptions of the positive relationship between start-up rates and innovation, the empirical support for this conjecture in the cross-country context is largely lacking. We draw upon recent advances in the entrepreneurship literature to propose that the relationship between start-up rates and innovation is not uniformly positive, as expected by the early scholars of entrepreneurship, but instead depends on the country's stage of development. The relationship is positive in the developed countries, but negative in countries in early development stages. On balance, there is a weak negative association between start-up rates and innovation. We test our hypotheses on a multi-source dataset that covers 35 countries over the period from 1996 to 2002. The relationships are robust to the choice of three moderators and two dependent variables, as well as a number of post-hoc tests. Our findings indicate that broad-strokes policy efforts that aim at promotion of entrepreneurship as a means to boost country innovativeness may be misguided, and instead suggest a contingency approach.

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Notes

  1. The countries in our dataset were Argentina, Australia, Belgium, Brazil, Canada, Chile, China, Croatia, Denmark, France, Germany, Greece, Hungary, India, Ireland, Israel, Italy, Japan, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Russia, Singapore, Slovenia, South Africa, Spain, Sweden, Switzerland, Thailand, the United Kingdom, the United States, and Venezuela.

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Acknowledgements

We thank the editor, Paul Almeida, as well as three anonymous reviewers for their valuable feedback, which helped improve the paper tremendously. Our special thanks go to David Deeds for inspiring the project, and to Bill Schulze for providing critical comments on the earlier drafts. Support from the Center for Interorganizational Research (CiiR) is gratefully acknowledged.

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Authors and Affiliations

  1. Kent State University, Kent, USA

    Sergey Anokhin

  2. Luleå University of Technology, Luleå, Sweden

    Joakim Wincent

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  1. Sergey Anokhin
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  2. Joakim Wincent
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Correspondence to Sergey Anokhin.

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Accepted by Paul Almeida, Area Editor, 14 September 2011. This paper has been with the authors for two revisions.

APPENDIX

APPENDIX

Table A1

Table A1 Key model re-analysis with and without imputed values of start-up rates
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Anokhin, S., Wincent, J. Start-up rates and innovation: A cross-country examination. J Int Bus Stud 43, 41–60 (2012). https://doi.org/10.1057/jibs.2011.47

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