Description
With this particular elucidation about entrepreneurial perceptions and activity differences and similarities.
Entrepreneurial Perceptions and Activity –
Differences and Similarities
in Four Eastern European Countries
Ágnes NAGY
Babe?-Bolyai, University, Cluj-Napoca
[email protected]
?tefan PETE
Babe?-Bolyai University, Cluj-Napoca
[email protected]
Lehel-Zoltán GYÖRFY
Babe?-Bolyai University, Cluj-Napoca
[email protected]
Tünde Petra PETRU
Babe?-Bolyai University, Cluj-Napoca
[email protected]
Annamária BENYOVSZKI
Babe?-Bolyai University, Cluj-Napoca
[email protected]
Abstract. The aim of this article is to reflect upon the differences
between entrepreneurial perceptions, attitudes and activity in Croatia,
Hungary, Romania and Serbia in 2007-2008 period using Global
Entrepreneurship Monitor Adult Population Survey database.
Keywords: entrepreneurship; entrepreneurial perceptions; entrepre-
neurial attitudes; early-stage entrepreneurs; nascent entrepreneurs; baby
business owner-manager; global entrepreneurship monitor; efficiency-
driven economies.
JEL Codes: M13, J26, C83.
REL Codes: 9B, 14D.
Theoretical and Applied Economics
Volume XVII (2010), No. 8(549), pp. 17-28
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
18
Introduction
Entrepreneurship is a subject widely treated in the economic literature.
Despite that there isn’t any universally accepted definition of the entrepreneur
or the entrepreneurial process, the specialists agree on their importance in the
economic development. The aim of this paper is the comparative analysis of the
Croatian, Hungarian, Romanian and Serbian entrepreneurial activity and
behaviour emphasizing the attitudes and the perceptions of the population
towards entrepreneurship.
1. Theoretical background
The entrepreneur concept isn’t clearly defined, being significantly
changed through its evolution in economic theories. Researchers’ debate on this
topic proved to be endless, without resulting until now a universally accepted
definition (Bygrave, Hofer, 1991).
Accepting the Global Entrepreneurship Monitor theoretical model for this
analysis, we used the following terms in assessing the entrepreneurial activity
of the adult population:
Nascent Entrepreneurs are those who are actively planning a new
venture. These entrepreneurs have done something during the previous
12 months to help start a new business, that he or she will at least
partly own. Activities such as organizing the start-up team, looking for
equipment, saving money for the start-up or writing a business plan
would all be considered as active commitments in starting a business.
This business has not paid salaries, wages or any other payments to the
owners for more than three months.
Young Business Entrepreneurs (baby business owner-managers) are
those entrepreneurs who at least partly own and manage a new
business that is between 4 and 42 months old and have not paid
salaries for longer than this period. These new ventures are in the first
42 month after the new venture has been set up.
Early-Stage Entrepreneurs refers to the early stage entrepreneurial
activity among the adult population aged between 18-64 years,
identified as nascent or young business entrepreneurs. In those cases
when the respondent is involved both as nascent and young business
entrepreneur then the respondent is counted only once as a nascent
entrepreneur.
Established Business Owners are those entrepreneurs who have set up
businesses that they have continued to own and manage and which had
Entrepreneurial Perceptions and Activity – Differences and Similarities in Four Eastern European Countries
19
paid wages and salaries for more than 42 months (Bosma et al., 2008,
p. 11).
The newly created businesses will create new jobs and they will
contribute further to the economic growth, stimulating both product and labour
force market. On the other hand, not all of the entrepreneurs will succeed. Van
Praag (2005) sees the entrepreneurial failure in the two following ways: the
entrepreneur doesn’t reach the phase in which he should employ labour force to
turn his business in a profitable organisation, the business created doesn’t
survive the first period and bankrupts. This indicates also the psychological and
social cost of the entrepreneurial failure.
In Bygrave and Minniti ’s (2000) opinion different cultures and regions
from many countries indicate a geographical concentration of the
entrepreneurial activities. The entrepreneurial activity might create proper
conditions for new market development and also new business opportunities,
catalysing the whole set of economical activities.
2. Data used
In our article we used the Global Entrepreneurship Monitor (GEM) 2007
and 2008 Adult Population Survey database for Croatia, Hungary, Romania and
Serbia.
GEM is a large scale research program launched in 1997 by leading
researchers in the field of entrepreneurship at London Business School and
Babson College. The first research was published in 1999 and it included 10
countries. Since then the project has been extended to include 42 countries in
2007, 43 in 2008 and 54 countries in 2009. The main aim of GEM research is to
study the complex relationship between entrepreneurship and economic growth,
to measure the level of entrepreneurial activity between countries, to uncover
factors determining the levels of entrepreneurial activity and to identify policies
which may stimulate the level of entrepreneurial activity. GEM, as a research
program that focuses on a major driver of economic growth, on
entrepreneurship, admits the widely acknowledged phenomena that
entrepreneurship is one of the most important forces shaping the changes in the
economic landscape.
In each country, a survey company conducts a telephone survey or face to
face interview of the adult population aged between 18 and 64 year. This survey
was carried out to measure the entrepreneurial behaviour and the attitudes of
adult population in Croatia, Hungary, Romania and Serbia. The survey data are
used to calculate the Total Entrepreneurial Activity Index (TEA), a comparable
measure of entrepreneurial activity across countries.
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
20
According to the Global Competitiveness Report, in the first stage, the
economy is factor-driven and countries compete based on their factor
endowments: primarily unskilled labor and natural resources. Companies
compete on the basis of price and sell basic products or commodities, with their
low productivity reflected in low wages. Maintaining competitiveness at this
stage of development hinges primarily on well-functioning public and private
institutions, well-developed infrastructure, a stable macroeconomic framework,
and a healthy and literate workforce. As wages rise with advancing
development, countries move into the efficiency-driven stage of development,
when they must begin to develop more efficient production processes and
increase product quality. At this point, competitiveness is increasingly driven
by higher education and training, efficient goods markets, well-functioning
labor markets, sophisticated financial markets, a large domestic and/or foreign
market, and the ability to harness the benefits of existing technologies. Finally,
as countries move into the innovation-driven stage, they are able to sustain
higher wages and the associated standard of living only if their businesses are
able to compete with new and unique products. At this stage, companies must
compete through innovation, producing new and different goods using the most
sophisticated production processes (Schwab, 2009, pp. 7-8).
The analyzed countries are efficiency-driven economies, from which
three (Croatia, Hungary, Romania) are in transition to innovation-driven
economies.
In Romania in 2007 a representative sample of 1739 adults aged between
18-64 years, in 2008 1667 adults was interviewed using the standard GEM
questionnaire. The size of the sample in Croatia was 1541 in 2007, 1696 in
2008, in Hungary 1500 in 2007, respectively 1994 in 2008, while in Serbia
1766 in 2007, 1813 in 2008.
3. The evolution of the entrepreneurial perceptions and attitudes
in the analyzed countries
According to Davidsson (1991) an important driver of national
entrepreneurial capacity is how people perceive entrepreneurship. Perceptions
about entrepreneurship may affect the supply side and the demand side of
entrepreneurship. The following figure presents the main components of
entrepreneurial attitudes according to Wennekers (2006).
Entrepreneurial Perceptions and Activity – Differences and Similarities in Four Eastern European Countries
21
Source: Bosma et al., 2008, p. 36.
Figure 1. Entrepreneurial perceptions, attitudes and entrepreneurial activity
The individual perceptions and attitudes regarding the entrepreneurial
activity in Croatia, Hungary, Romania and Serbia describe a changed situation
in the analyzed period as it can be seen in Table 1.
The obtained results emphasize similarities in the perception of Croatian
and Serbian people towards entrepreneurship in the both analyzed years, in
comparison with Romania and Hungary. In Croatia and Serbia,
entrepreneurship informal networks might be built easier and entrepreneurial
models are easier observed in the personal environment of the people. In 2008
in Croatia 57.21% (60.04% in 2007) and in Serbia (59.11% in 2008) of the
adult population aged between 18 and 64 years know somebody who started a
business in the past two years, while in Romania 41.23% (46.96% in 2007) and
in Hungary only 32.39%. The share of those who saw good business
opportunities for the next half year was similar in Romania and Hungary in
2007 (27.36%, respectively 29.62%), share which remains at the same level in
2008 in Romania and decreased to 22.42% in Hungary. These results describe
much less opportunity recognition than the around 50% positive answer in case
of Serbia and Croatia in the analyzed period. The opportunity perception of
starting a new business decreased in the analyzed countries, with one exception,
Serbia.
Serbian and Croatian citizens seem to be, according to our analysis,
much more self confident in their entrepreneurial skills, almost two thirds of the
adult population thinking that they have the required experience and skills to
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
22
start a business, while in Hungary half of the population considers this. While
this share remained at the same level in the three mentioned countries in 2008
as it was in 2007 (with a slight increase in Hungary), in Romania the lowest
share from the four analyzed countries decreased from one third to 28.67% in
2008. The proportion of those whom the fear of failure would prevent from
starting a new business increased considerably in Hungary and Romania (from
29.57% in 2007 to 39.77% in 2008, respectively from 29.05% to 40.62%),
while in 2007 it was indicated the same (around 30%) level in each country.
The entrepreneurship, as career of choice, is appreciated positively in each
country. In Romania, in 2008 almost half of the adults think that people would
prefer that everyone should have the same standard life, this aspect is much
worse in Hungary, especially (with around 80%) in Serbia and Croatia. The
proportion of those who consider that the successful businesses get a good
media coverage and are properly promoted is much lower in Hungary than in
the other analyzed countries.
Table 1
Entrepreneurial perceptions and attitudes, 2007-2008 (%)
Croatia Hungary Romania Serbia
2007 60.04 32.80 46.96 59.11 Do you know someone personally
who started a business in the past
two years?
2008 57.21 32.39 41.23 57.91
2007 47.26 27.36 29.62 49.10 In the next six months there will be
good opportunities for starting a
business in the area where you live?
2008 46.66 22.42 28.01 54.02
2007 65.89 53.50 34.84 69.15 Do you have the knowledge, skill
and experience required to start a
new business?
2008 65.10 55.92 28.67 69.67
2007 32.37 29.57 29.05 29.24 Would the fear of failure prevent you
from starting a business? 2008 33.54 39.77 40.62 28.51
2007 80.87 66.03 48.31 76.56 In my country, most people would
prefer that everyone had a similar
standard of living.
2008 79.90 61.27 48.93 79.88
2007 72.22 58.80 63.07 78.17 In my country, most people consider
starting a new business a desirable
career choice.
2008 70.70 46.97 - 71.60
2007 50.88 65.23 63.48 62.05 In my country, those successful at
starting a new business have a high
level of status and respect.
2008 53.94 57.63 68.68 65.18
2007 63.92 23.71 53.39 65.58 In my country, you will often see
stories in the public media about
successful new businesses.
2008 60.76 20.55 57.71 67.24
Source: Own calculations in SPSS based on GEM, Adult Population Survey, 2007-2008.
Entrepreneurial Perceptions and Activity – Differences and Similarities in Four Eastern European Countries
23
The comparisons of proportions of those who gave a positive answer to
the above questions are shown in Table 2. In each analyzed year the proportion
of those who know a nascent entrepreneur in Croatia and Serbia is significantly
higher than in Romania and Hungary, and in Romania is significantly higher
than in Hungary. In 2008 the proportion of those who perceive good
opportunities for starting a business in the next six months in the area where
they live is significantly higher than in the other analyzed countries.
Table 2
Comparisons of proportions of entrepreneurial perceptions and attitudes,
2007-2008
a,b
(%)
Croatia Hungary Romania Serbia
(A) (B) (C) (D)
2007 B C - B B C Do you know someone personally who
started a business in the past two years?
2008 B C - B B C
2007 B C - - B C In the next six months there will be good
opportunities for starting a business in
the area where you live?
2008 B C - B A B C
2007 B C C - B C Do you have the knowledge, skill and
experience required to start a new
business?
2008 B C C - B C
2007 - - - - Would the fear of failure prevent you from
starting a business?
2008 D A D A D -
2007 B C C - B C In my country, most people would prefer
that everyone had a similar standard of
living.
2008 B C C - B C
2007 B C - - A B C In my country, most people consider
starting a new business a desirable
career choice.
2008 B - - B
2007 - A A A In my country, those successful at
starting a new business have a high level
of status and respect.
2008 - - A B A B
2007 B C - B B C In my country, you will often see stories
in the public media about successful new
businesses.
2008 B - B A B C
Note:
Results are based on two-sided tests with significance level 0.05. For each significant pair, the key of the category
with the smaller column proportion appears under the category with the larger column proportion.
a. Tests are adjusted for all pair wise comparisons within a row of each innermost subtable using the Bonferroni
correction.
b. Cell counts of some categories are not integers. They were rounded to the nearest integers before performing
column proportions tests.
Source: Own calculations in SPSS based on GEM, Adult Population Survey, 2007-2008.
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
24
The proportion of those who perceive themselves capable (i.e., they
believe they have the required skills and knowledge to start a business) in
Croatia and Serbia are significantly higher than in Hungary and Romania, this
rate is the lowest in Romania. While in 2007 there is no significant difference
between the proportions of those who have fear of failure in the analyzed
countries, in 2008 this proportion is significantly higher in Hungary and
Romania. In 2007, in Serbia it was the highest the proportion of those who
consider that starting a business is a good career choice, in 2008 it was higher
only than in Hungary. In Croatia the people attach the less high status to
successful entrepreneurs in 2007 than in the other analyzed countries. In 2008
in Serbia is the higher the media attention for entrepreneurship.
4. Differences in entrepreneurial activity in case of the analyzed countries
The entrepreneurial perceptions and attitudes have impact on the
entrepreneurial activity of the countries. As it can be seen in Table 3, the
proportion of nascent entrepreneurs is the lowest in each analyzed year in
Romania. The proportion of baby business owner-managers and established
business owners are the highest in Serbia in each year, despite of the measured
decrease of baby business owner-manager rate in 2008. Analyzing the
entrepreneurial motivation, we can conclude that in Romania can be found the
lowest opportunity-driven early-stage entrepreneurial activity rate. The
necessity-driven early-stage entrepreneurial activity is the lowest in Romania,
but also here can be seen a considerable increasing in accordance to 2007.
Table 3
Evolution of the entrepreneurial activity in the analyzed countries, 2007-2008 (%)
Croatia Hungary Romania Serbia
2007 7.27 6.86 4.02 8.56 Involved in total early-stage entrepreneurial
activity
2008 7.59 6.61 3.98 7.59
2007 5.31 3.77 2.90 4.75 Actively involved in start-up effort, owner, no
wages yet (nascent entrepreneurs)
2008 4.91 3.84 2.54 3.97
2007 1.96 3.10 1.32 4.01 Manages and owns a business that is up to 42
months old (baby business owner-managers)
2008 2.75 2.80 1.56 3.62
2007 4.22 4.83 2.51 5.27 Manages and owns a business that is older than
42 months (established entrepreneurs)
2008 4.83 5.34 2.07 9.26
2007 4.16 5.01 2.68 4.02 Involved in opportunity early-stage
entrepreneurial activity
2008 5.43 4.44 2.12 4.69
2007 2.90 1.60 0.56 3.94 Involved in necessity early-stage
entrepreneurial activity
2008 2.16 1.87 1.37 2.53
Source: Own calculations in SPSS based on GEM, Adult Population Survey, 2007-2008.
Entrepreneurial Perceptions and Activity – Differences and Similarities in Four Eastern European Countries
25
The total early-stage entrepreneurial activity rate is significantly lower in
Romania than in the analyzed countries in each year. The proportion of baby
business owner-managers in 2007 is significantly lower in Romania than in
Hungary and Serbia, while in 2008 only in Serbia is significantly higher than in
Romania. The rate of the established business owners is significantly higher in
Serbia and Hungary than in Romania, meanwhile in 2008 this rate is
significantly higher in Serbia than in all analyzed countries. We can observe
that the opportunity-driven early-stage entrepreneurial activity rate measured in
Romania is significantly lower than in Croatia, Hungary and Serbia. In 2008
there is no significant difference in case of the necessity-driven early-stage
entrepreneurial activity rate.
Table 4
Differences between the means of the entrepreneurial activity rates of Croatia, Hungary,
Romania and Serbia, 2007-2008
a,b
Croatia Hungary Romania Serbia
(A) (B) (C) (D)
2007 C C - C Involved in total early-stage entrepreneurial
activity
2008 C C - C
2007 C - - C Actively involved in start-up effort, owner, no
wages yet (nascent entrepreneurs)
2008 C - - -
2007 - C - A C Manages and owns a business that is up to 42
months old (baby business owner-managers)
2008 - - - C
2007 - C - C Manages and owns a business that is older than
42 months (established entrepreneurs)
2008 C C - A B C
2007 - C - - Involved in opportunity early-stage
entrepreneurial activity
2008 C C - C
2007 C - - B C Involved in necessity early-stage entrepreneurial
activity
2008 - - - -
Note:
Results are based on two-sided tests assuming equal variances with significance level 0.05. For each significant
pair, the key of the smaller category appears under the category with larger mean.
a. Tests are adjusted for all pairwise comparisons within a row of each innermost subtable using the Bonferroni
correction.
b. Cell counts in some subtables are not integers. They were rounded to the nearest integers before
performing pairwise comparisons.
Source: Own calculations in SPSS based on GEM, Adult Population Survey, 2007-2008.
Analyzing the entrepreneurial profile, according to Figure 2, we can
affirm that the early-stage entrepreneur in 2007 and 2008 is male, aged between
25 and 34 years in all countries, except for Serbia, where the most frequent age
category is 35-44 years. In Hungary and Romania in each year the income of
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
26
the early-stage entrepreneur’s household is situated in upper 33% tile, while in
Serbia in the lowest 33% tile. The educational level of the early-stage
entrepreneur is significantly higher in Romania and Hungary than in Croatia
and Serbia.
Source: Own calculations in SPSS based on GEM APS data.
Figure 2. The distribution of early-stage entrepreneurs by household income,
age categories, year of survey and country of origin
The figure below shows that the established entrepreneur in 2007 is male,
aged between 35 and 44 years in all countries, except Hungary (where the most
frequent age category is 55-64 years). In Hungary and Romania, in each year,
the income of the established entrepreneur’s household is situated in the upper
33% tile, while in Serbia in the middle 33% tile in 2007, while in 2008 the
lowest 33% tile, meanwhile in the case of Croatia in 2007 the household
income category was middle 33% tile, which in 2008 moved to the upper 33%
tile category. The educational level of the established entrepreneur is
significantly higher in Hungary than in Croatia, Romania and Serbia.
Entrepreneurial Perceptions and Activity – Differences and Similarities in Four Eastern European Countries
27
Source: Own calculations in SPSS based on GEM APS data.
Figure 3. The distribution of established entrepreneurs by household income,
age categories, year of survey and country of origin
5. Conclusions
We studied the main differences between the entrepreneurial perceptions
and attitudes in Croatia, Hungary, Romania and Serbia in 2007-2008 time
period based on GEM Adult Population Survey database. In each analyzed year
the proportion of those who know a nascent entrepreneur in Croatia and Serbia
is significantly higher than in Romania and Hungary, and in Romania is
significantly higher than in Hungary. In 2008 the proportion of those who
perceive good opportunities for starting a business in the next six months in the
area where they live is significantly higher in Serbia than in the other analyzed
countries. The proportion of those who perceive themselves capable in Croatia
and Serbia are significantly higher than in Hungary and Romania, this rate
being the lowest in Romania. While in 2007 there is no significant difference
between the proportions of those who have fear of failure in the analyzed
countries, in 2008 this proportion is significantly higher in Hungary and
Romania.
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
28
Our findings regarding the entrepreneurial activity are: the total early-
stage entrepreneurial activity rate is significantly lowest in Romania than in the
analyzed countries in each year; while the rate of the established business
owners is significantly higher in Serbia and Hungary than in Romania,
meanwhile in 2008 this rate is significantly higher in Serbia than in all analyzed
countries.
References
Bosma, N., Acs, Z.J., Autio, E., Coduras, A., Levie, J. (2009), “Global Entrepreneurship
Monitor. 2008 Executive report”, Babson College, Universidad del Desarrollo, London
Business School and Global Entrepreneurship Research Consortium (GERA)
Bosma, N., Jones, K., Autio, E., Levie, J. (2008), “Global Entrepreneurship Monitor 2007,
Executive Report”, Babson College, London Business School and Global
Entrepreneurship Research Consortium (GERA)
Bygrave, W., Hofer, C.W., „Theorizing about entrepreneurship”, Entrepreneurship Theory and
Practice, Winter, 1991, pp. 13-22
Bygrave, W., Minniti, M., „The social dynamics of entrepreneurship”, Entrepreneurship Theory
and Practice, Spring, 2000, pp. 25-36
Davidsson, P., “Continued Entrepreneurship: Ability, Need, and Opportunity as determinants of
Small Firm Growth”, Journal of Business Venturing, vol. 6(6), 1991, pp. 405-429
Wennekers, A.R.M. (2006), “Entrepreneurship at country level; Economic and non economic
determinants”, ERIM Ph.D. Series Research in Management, Erasmus University
Rotterdam
Schwab, K. (ed.) (2009), “The Global Competitiveness Report 2009-2010”, World Economic
Forum, Geneva, Switzerland
Shane, S., Venkataraman, S., „The Promise of Entrepreneurship as a Field of Research”,
Academy of Management Review, vol. 25(1), 2000, pp. 217-226
van Praag, M. (2005), Successful Entrepreneurship Edward Elgar, London
Venkataraman, S. (1997). The Distinctive Domain of Entrepreneurship Research, in Katz J.,
Brockhaus (ed.): Advances in Entrepreneurship, Firm Emergence and Growth, vol. 3.,
pp. 119-138, JAI Press, Greenwich, CT
doc_547187742.pdf
With this particular elucidation about entrepreneurial perceptions and activity differences and similarities.
Entrepreneurial Perceptions and Activity –
Differences and Similarities
in Four Eastern European Countries
Ágnes NAGY
Babe?-Bolyai, University, Cluj-Napoca
[email protected]
?tefan PETE
Babe?-Bolyai University, Cluj-Napoca
[email protected]
Lehel-Zoltán GYÖRFY
Babe?-Bolyai University, Cluj-Napoca
[email protected]
Tünde Petra PETRU
Babe?-Bolyai University, Cluj-Napoca
[email protected]
Annamária BENYOVSZKI
Babe?-Bolyai University, Cluj-Napoca
[email protected]
Abstract. The aim of this article is to reflect upon the differences
between entrepreneurial perceptions, attitudes and activity in Croatia,
Hungary, Romania and Serbia in 2007-2008 period using Global
Entrepreneurship Monitor Adult Population Survey database.
Keywords: entrepreneurship; entrepreneurial perceptions; entrepre-
neurial attitudes; early-stage entrepreneurs; nascent entrepreneurs; baby
business owner-manager; global entrepreneurship monitor; efficiency-
driven economies.
JEL Codes: M13, J26, C83.
REL Codes: 9B, 14D.
Theoretical and Applied Economics
Volume XVII (2010), No. 8(549), pp. 17-28
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
18
Introduction
Entrepreneurship is a subject widely treated in the economic literature.
Despite that there isn’t any universally accepted definition of the entrepreneur
or the entrepreneurial process, the specialists agree on their importance in the
economic development. The aim of this paper is the comparative analysis of the
Croatian, Hungarian, Romanian and Serbian entrepreneurial activity and
behaviour emphasizing the attitudes and the perceptions of the population
towards entrepreneurship.
1. Theoretical background
The entrepreneur concept isn’t clearly defined, being significantly
changed through its evolution in economic theories. Researchers’ debate on this
topic proved to be endless, without resulting until now a universally accepted
definition (Bygrave, Hofer, 1991).
Accepting the Global Entrepreneurship Monitor theoretical model for this
analysis, we used the following terms in assessing the entrepreneurial activity
of the adult population:
Nascent Entrepreneurs are those who are actively planning a new
venture. These entrepreneurs have done something during the previous
12 months to help start a new business, that he or she will at least
partly own. Activities such as organizing the start-up team, looking for
equipment, saving money for the start-up or writing a business plan
would all be considered as active commitments in starting a business.
This business has not paid salaries, wages or any other payments to the
owners for more than three months.
Young Business Entrepreneurs (baby business owner-managers) are
those entrepreneurs who at least partly own and manage a new
business that is between 4 and 42 months old and have not paid
salaries for longer than this period. These new ventures are in the first
42 month after the new venture has been set up.
Early-Stage Entrepreneurs refers to the early stage entrepreneurial
activity among the adult population aged between 18-64 years,
identified as nascent or young business entrepreneurs. In those cases
when the respondent is involved both as nascent and young business
entrepreneur then the respondent is counted only once as a nascent
entrepreneur.
Established Business Owners are those entrepreneurs who have set up
businesses that they have continued to own and manage and which had
Entrepreneurial Perceptions and Activity – Differences and Similarities in Four Eastern European Countries
19
paid wages and salaries for more than 42 months (Bosma et al., 2008,
p. 11).
The newly created businesses will create new jobs and they will
contribute further to the economic growth, stimulating both product and labour
force market. On the other hand, not all of the entrepreneurs will succeed. Van
Praag (2005) sees the entrepreneurial failure in the two following ways: the
entrepreneur doesn’t reach the phase in which he should employ labour force to
turn his business in a profitable organisation, the business created doesn’t
survive the first period and bankrupts. This indicates also the psychological and
social cost of the entrepreneurial failure.
In Bygrave and Minniti ’s (2000) opinion different cultures and regions
from many countries indicate a geographical concentration of the
entrepreneurial activities. The entrepreneurial activity might create proper
conditions for new market development and also new business opportunities,
catalysing the whole set of economical activities.
2. Data used
In our article we used the Global Entrepreneurship Monitor (GEM) 2007
and 2008 Adult Population Survey database for Croatia, Hungary, Romania and
Serbia.
GEM is a large scale research program launched in 1997 by leading
researchers in the field of entrepreneurship at London Business School and
Babson College. The first research was published in 1999 and it included 10
countries. Since then the project has been extended to include 42 countries in
2007, 43 in 2008 and 54 countries in 2009. The main aim of GEM research is to
study the complex relationship between entrepreneurship and economic growth,
to measure the level of entrepreneurial activity between countries, to uncover
factors determining the levels of entrepreneurial activity and to identify policies
which may stimulate the level of entrepreneurial activity. GEM, as a research
program that focuses on a major driver of economic growth, on
entrepreneurship, admits the widely acknowledged phenomena that
entrepreneurship is one of the most important forces shaping the changes in the
economic landscape.
In each country, a survey company conducts a telephone survey or face to
face interview of the adult population aged between 18 and 64 year. This survey
was carried out to measure the entrepreneurial behaviour and the attitudes of
adult population in Croatia, Hungary, Romania and Serbia. The survey data are
used to calculate the Total Entrepreneurial Activity Index (TEA), a comparable
measure of entrepreneurial activity across countries.
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
20
According to the Global Competitiveness Report, in the first stage, the
economy is factor-driven and countries compete based on their factor
endowments: primarily unskilled labor and natural resources. Companies
compete on the basis of price and sell basic products or commodities, with their
low productivity reflected in low wages. Maintaining competitiveness at this
stage of development hinges primarily on well-functioning public and private
institutions, well-developed infrastructure, a stable macroeconomic framework,
and a healthy and literate workforce. As wages rise with advancing
development, countries move into the efficiency-driven stage of development,
when they must begin to develop more efficient production processes and
increase product quality. At this point, competitiveness is increasingly driven
by higher education and training, efficient goods markets, well-functioning
labor markets, sophisticated financial markets, a large domestic and/or foreign
market, and the ability to harness the benefits of existing technologies. Finally,
as countries move into the innovation-driven stage, they are able to sustain
higher wages and the associated standard of living only if their businesses are
able to compete with new and unique products. At this stage, companies must
compete through innovation, producing new and different goods using the most
sophisticated production processes (Schwab, 2009, pp. 7-8).
The analyzed countries are efficiency-driven economies, from which
three (Croatia, Hungary, Romania) are in transition to innovation-driven
economies.
In Romania in 2007 a representative sample of 1739 adults aged between
18-64 years, in 2008 1667 adults was interviewed using the standard GEM
questionnaire. The size of the sample in Croatia was 1541 in 2007, 1696 in
2008, in Hungary 1500 in 2007, respectively 1994 in 2008, while in Serbia
1766 in 2007, 1813 in 2008.
3. The evolution of the entrepreneurial perceptions and attitudes
in the analyzed countries
According to Davidsson (1991) an important driver of national
entrepreneurial capacity is how people perceive entrepreneurship. Perceptions
about entrepreneurship may affect the supply side and the demand side of
entrepreneurship. The following figure presents the main components of
entrepreneurial attitudes according to Wennekers (2006).
Entrepreneurial Perceptions and Activity – Differences and Similarities in Four Eastern European Countries
21
Source: Bosma et al., 2008, p. 36.
Figure 1. Entrepreneurial perceptions, attitudes and entrepreneurial activity
The individual perceptions and attitudes regarding the entrepreneurial
activity in Croatia, Hungary, Romania and Serbia describe a changed situation
in the analyzed period as it can be seen in Table 1.
The obtained results emphasize similarities in the perception of Croatian
and Serbian people towards entrepreneurship in the both analyzed years, in
comparison with Romania and Hungary. In Croatia and Serbia,
entrepreneurship informal networks might be built easier and entrepreneurial
models are easier observed in the personal environment of the people. In 2008
in Croatia 57.21% (60.04% in 2007) and in Serbia (59.11% in 2008) of the
adult population aged between 18 and 64 years know somebody who started a
business in the past two years, while in Romania 41.23% (46.96% in 2007) and
in Hungary only 32.39%. The share of those who saw good business
opportunities for the next half year was similar in Romania and Hungary in
2007 (27.36%, respectively 29.62%), share which remains at the same level in
2008 in Romania and decreased to 22.42% in Hungary. These results describe
much less opportunity recognition than the around 50% positive answer in case
of Serbia and Croatia in the analyzed period. The opportunity perception of
starting a new business decreased in the analyzed countries, with one exception,
Serbia.
Serbian and Croatian citizens seem to be, according to our analysis,
much more self confident in their entrepreneurial skills, almost two thirds of the
adult population thinking that they have the required experience and skills to
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
22
start a business, while in Hungary half of the population considers this. While
this share remained at the same level in the three mentioned countries in 2008
as it was in 2007 (with a slight increase in Hungary), in Romania the lowest
share from the four analyzed countries decreased from one third to 28.67% in
2008. The proportion of those whom the fear of failure would prevent from
starting a new business increased considerably in Hungary and Romania (from
29.57% in 2007 to 39.77% in 2008, respectively from 29.05% to 40.62%),
while in 2007 it was indicated the same (around 30%) level in each country.
The entrepreneurship, as career of choice, is appreciated positively in each
country. In Romania, in 2008 almost half of the adults think that people would
prefer that everyone should have the same standard life, this aspect is much
worse in Hungary, especially (with around 80%) in Serbia and Croatia. The
proportion of those who consider that the successful businesses get a good
media coverage and are properly promoted is much lower in Hungary than in
the other analyzed countries.
Table 1
Entrepreneurial perceptions and attitudes, 2007-2008 (%)
Croatia Hungary Romania Serbia
2007 60.04 32.80 46.96 59.11 Do you know someone personally
who started a business in the past
two years?
2008 57.21 32.39 41.23 57.91
2007 47.26 27.36 29.62 49.10 In the next six months there will be
good opportunities for starting a
business in the area where you live?
2008 46.66 22.42 28.01 54.02
2007 65.89 53.50 34.84 69.15 Do you have the knowledge, skill
and experience required to start a
new business?
2008 65.10 55.92 28.67 69.67
2007 32.37 29.57 29.05 29.24 Would the fear of failure prevent you
from starting a business? 2008 33.54 39.77 40.62 28.51
2007 80.87 66.03 48.31 76.56 In my country, most people would
prefer that everyone had a similar
standard of living.
2008 79.90 61.27 48.93 79.88
2007 72.22 58.80 63.07 78.17 In my country, most people consider
starting a new business a desirable
career choice.
2008 70.70 46.97 - 71.60
2007 50.88 65.23 63.48 62.05 In my country, those successful at
starting a new business have a high
level of status and respect.
2008 53.94 57.63 68.68 65.18
2007 63.92 23.71 53.39 65.58 In my country, you will often see
stories in the public media about
successful new businesses.
2008 60.76 20.55 57.71 67.24
Source: Own calculations in SPSS based on GEM, Adult Population Survey, 2007-2008.
Entrepreneurial Perceptions and Activity – Differences and Similarities in Four Eastern European Countries
23
The comparisons of proportions of those who gave a positive answer to
the above questions are shown in Table 2. In each analyzed year the proportion
of those who know a nascent entrepreneur in Croatia and Serbia is significantly
higher than in Romania and Hungary, and in Romania is significantly higher
than in Hungary. In 2008 the proportion of those who perceive good
opportunities for starting a business in the next six months in the area where
they live is significantly higher than in the other analyzed countries.
Table 2
Comparisons of proportions of entrepreneurial perceptions and attitudes,
2007-2008
a,b
(%)
Croatia Hungary Romania Serbia
(A) (B) (C) (D)
2007 B C - B B C Do you know someone personally who
started a business in the past two years?
2008 B C - B B C
2007 B C - - B C In the next six months there will be good
opportunities for starting a business in
the area where you live?
2008 B C - B A B C
2007 B C C - B C Do you have the knowledge, skill and
experience required to start a new
business?
2008 B C C - B C
2007 - - - - Would the fear of failure prevent you from
starting a business?
2008 D A D A D -
2007 B C C - B C In my country, most people would prefer
that everyone had a similar standard of
living.
2008 B C C - B C
2007 B C - - A B C In my country, most people consider
starting a new business a desirable
career choice.
2008 B - - B
2007 - A A A In my country, those successful at
starting a new business have a high level
of status and respect.
2008 - - A B A B
2007 B C - B B C In my country, you will often see stories
in the public media about successful new
businesses.
2008 B - B A B C
Note:
Results are based on two-sided tests with significance level 0.05. For each significant pair, the key of the category
with the smaller column proportion appears under the category with the larger column proportion.
a. Tests are adjusted for all pair wise comparisons within a row of each innermost subtable using the Bonferroni
correction.
b. Cell counts of some categories are not integers. They were rounded to the nearest integers before performing
column proportions tests.
Source: Own calculations in SPSS based on GEM, Adult Population Survey, 2007-2008.
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
24
The proportion of those who perceive themselves capable (i.e., they
believe they have the required skills and knowledge to start a business) in
Croatia and Serbia are significantly higher than in Hungary and Romania, this
rate is the lowest in Romania. While in 2007 there is no significant difference
between the proportions of those who have fear of failure in the analyzed
countries, in 2008 this proportion is significantly higher in Hungary and
Romania. In 2007, in Serbia it was the highest the proportion of those who
consider that starting a business is a good career choice, in 2008 it was higher
only than in Hungary. In Croatia the people attach the less high status to
successful entrepreneurs in 2007 than in the other analyzed countries. In 2008
in Serbia is the higher the media attention for entrepreneurship.
4. Differences in entrepreneurial activity in case of the analyzed countries
The entrepreneurial perceptions and attitudes have impact on the
entrepreneurial activity of the countries. As it can be seen in Table 3, the
proportion of nascent entrepreneurs is the lowest in each analyzed year in
Romania. The proportion of baby business owner-managers and established
business owners are the highest in Serbia in each year, despite of the measured
decrease of baby business owner-manager rate in 2008. Analyzing the
entrepreneurial motivation, we can conclude that in Romania can be found the
lowest opportunity-driven early-stage entrepreneurial activity rate. The
necessity-driven early-stage entrepreneurial activity is the lowest in Romania,
but also here can be seen a considerable increasing in accordance to 2007.
Table 3
Evolution of the entrepreneurial activity in the analyzed countries, 2007-2008 (%)
Croatia Hungary Romania Serbia
2007 7.27 6.86 4.02 8.56 Involved in total early-stage entrepreneurial
activity
2008 7.59 6.61 3.98 7.59
2007 5.31 3.77 2.90 4.75 Actively involved in start-up effort, owner, no
wages yet (nascent entrepreneurs)
2008 4.91 3.84 2.54 3.97
2007 1.96 3.10 1.32 4.01 Manages and owns a business that is up to 42
months old (baby business owner-managers)
2008 2.75 2.80 1.56 3.62
2007 4.22 4.83 2.51 5.27 Manages and owns a business that is older than
42 months (established entrepreneurs)
2008 4.83 5.34 2.07 9.26
2007 4.16 5.01 2.68 4.02 Involved in opportunity early-stage
entrepreneurial activity
2008 5.43 4.44 2.12 4.69
2007 2.90 1.60 0.56 3.94 Involved in necessity early-stage
entrepreneurial activity
2008 2.16 1.87 1.37 2.53
Source: Own calculations in SPSS based on GEM, Adult Population Survey, 2007-2008.
Entrepreneurial Perceptions and Activity – Differences and Similarities in Four Eastern European Countries
25
The total early-stage entrepreneurial activity rate is significantly lower in
Romania than in the analyzed countries in each year. The proportion of baby
business owner-managers in 2007 is significantly lower in Romania than in
Hungary and Serbia, while in 2008 only in Serbia is significantly higher than in
Romania. The rate of the established business owners is significantly higher in
Serbia and Hungary than in Romania, meanwhile in 2008 this rate is
significantly higher in Serbia than in all analyzed countries. We can observe
that the opportunity-driven early-stage entrepreneurial activity rate measured in
Romania is significantly lower than in Croatia, Hungary and Serbia. In 2008
there is no significant difference in case of the necessity-driven early-stage
entrepreneurial activity rate.
Table 4
Differences between the means of the entrepreneurial activity rates of Croatia, Hungary,
Romania and Serbia, 2007-2008
a,b
Croatia Hungary Romania Serbia
(A) (B) (C) (D)
2007 C C - C Involved in total early-stage entrepreneurial
activity
2008 C C - C
2007 C - - C Actively involved in start-up effort, owner, no
wages yet (nascent entrepreneurs)
2008 C - - -
2007 - C - A C Manages and owns a business that is up to 42
months old (baby business owner-managers)
2008 - - - C
2007 - C - C Manages and owns a business that is older than
42 months (established entrepreneurs)
2008 C C - A B C
2007 - C - - Involved in opportunity early-stage
entrepreneurial activity
2008 C C - C
2007 C - - B C Involved in necessity early-stage entrepreneurial
activity
2008 - - - -
Note:
Results are based on two-sided tests assuming equal variances with significance level 0.05. For each significant
pair, the key of the smaller category appears under the category with larger mean.
a. Tests are adjusted for all pairwise comparisons within a row of each innermost subtable using the Bonferroni
correction.
b. Cell counts in some subtables are not integers. They were rounded to the nearest integers before
performing pairwise comparisons.
Source: Own calculations in SPSS based on GEM, Adult Population Survey, 2007-2008.
Analyzing the entrepreneurial profile, according to Figure 2, we can
affirm that the early-stage entrepreneur in 2007 and 2008 is male, aged between
25 and 34 years in all countries, except for Serbia, where the most frequent age
category is 35-44 years. In Hungary and Romania in each year the income of
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
26
the early-stage entrepreneur’s household is situated in upper 33% tile, while in
Serbia in the lowest 33% tile. The educational level of the early-stage
entrepreneur is significantly higher in Romania and Hungary than in Croatia
and Serbia.
Source: Own calculations in SPSS based on GEM APS data.
Figure 2. The distribution of early-stage entrepreneurs by household income,
age categories, year of survey and country of origin
The figure below shows that the established entrepreneur in 2007 is male,
aged between 35 and 44 years in all countries, except Hungary (where the most
frequent age category is 55-64 years). In Hungary and Romania, in each year,
the income of the established entrepreneur’s household is situated in the upper
33% tile, while in Serbia in the middle 33% tile in 2007, while in 2008 the
lowest 33% tile, meanwhile in the case of Croatia in 2007 the household
income category was middle 33% tile, which in 2008 moved to the upper 33%
tile category. The educational level of the established entrepreneur is
significantly higher in Hungary than in Croatia, Romania and Serbia.
Entrepreneurial Perceptions and Activity – Differences and Similarities in Four Eastern European Countries
27
Source: Own calculations in SPSS based on GEM APS data.
Figure 3. The distribution of established entrepreneurs by household income,
age categories, year of survey and country of origin
5. Conclusions
We studied the main differences between the entrepreneurial perceptions
and attitudes in Croatia, Hungary, Romania and Serbia in 2007-2008 time
period based on GEM Adult Population Survey database. In each analyzed year
the proportion of those who know a nascent entrepreneur in Croatia and Serbia
is significantly higher than in Romania and Hungary, and in Romania is
significantly higher than in Hungary. In 2008 the proportion of those who
perceive good opportunities for starting a business in the next six months in the
area where they live is significantly higher in Serbia than in the other analyzed
countries. The proportion of those who perceive themselves capable in Croatia
and Serbia are significantly higher than in Hungary and Romania, this rate
being the lowest in Romania. While in 2007 there is no significant difference
between the proportions of those who have fear of failure in the analyzed
countries, in 2008 this proportion is significantly higher in Hungary and
Romania.
Ágnes Nagy, ?tefan Pete, Lehel-Zoltán Györfy, Tünde Petra Petru, Annamária Benyovszki
28
Our findings regarding the entrepreneurial activity are: the total early-
stage entrepreneurial activity rate is significantly lowest in Romania than in the
analyzed countries in each year; while the rate of the established business
owners is significantly higher in Serbia and Hungary than in Romania,
meanwhile in 2008 this rate is significantly higher in Serbia than in all analyzed
countries.
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