A theoretical grounding and test of the GEM model

J.D. Levie, Erkko Autio

Research output: Contribution to journalArticle

227 Citations (Scopus)
275 Downloads (Pure)

Abstract

The Global Entrepreneurship Monitor model combines insights on the allocation of effort into entrepreneurship at the national (adult working age population) level with literature in the Aus-trian tradition. The model suggests that the relationship between national-level new business ac-tivity and the institutional environment, or Entrepreneurial Framework Conditions, is mediated by opportunity perception and the perception of start-up skills in the population. We provide a theory-grounded examination of this model and test the effect of one EFC, education and train-ing for entrepreneurship, on the allocation of effort into new business activity. We find that in high-income countries, opportunity perception mediates fully the relationship between the level of post-secondary entrepreneurship education and training in a country and its rate of new busi-ness activity, including high-growth expectation new business activity. The mediating effect of skills perception is weaker. This result accords with the Kirznerian concept of alertness to oppor-tunity stimulating action.
Original languageEnglish
Pages (from-to)235-263
Number of pages29
JournalSmall Business Economics
Volume31
Issue number3
DOIs
Publication statusPublished - Oct 2008

Keywords

  • entrepreneurial activity
  • entrepreneurial framework conditions

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