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Why Are Some Societies More Entrepreneurial than Others? (ssrn.com)
155 points by elsewhen 24 days ago | hide | past | web | favorite | 123 comments



There's a good book on this called "Why Nations Fail," [1] they posit that extractive economic policies (corrupted governments) essentially de-incentivize entrepreneurial businesses, while inclusive policies cause them to thrive.

They use this argument to counter "Guns, Germs, and Steel" [2] to explain dramatic economic differences across country borders in similar environments.

[1] https://www.goodreads.com/book/show/12158480-why-nations-fai...

[2] https://www.goodreads.com/book/show/1842.Guns_Germs_and_Stee...


Interesting!

Anecdotally I'm an Israeli who moved to Europe (first Austria then Germany) and at least from my layman's perspective both of these countries seem both a lot less entrepreneurial than Israel and a lot less corrupt...

So I wonder if something unusual is going on or if one or more of my perceptions are wrong.


I think there is a difference between "informal" corruption (where some officials need to be bribed) and the "institutionalized" corruption of a monolithic and completely unnecessary bureaucracy. At least in the first instance, there is a path to get things done. European bureaucracy is a tar pit where innovative business goes to die.


> European bureaucracy is a tar pit where innovative business goes to die.

There are 27/28 economies in the EU alone, ranging from Sweden to Greece, with very different cultures, laws and bureaucratic competencies, some of whom have successfully incubated very innovative businesses.


Yet they often have a higher quality of life, universal access to social services, and afford the general public longer periods of economic stability relative to the shitshow the US descends into every 4-8 yrs.

Perhaps innovative business (which I translate to “how to enrich myself via an ephemeral finance system without adding much new utility” these days”) isn’t a great target for governments to enable.

Social pressure downward to abide the desires of a minority of elites before the public used to be called authoritarianism, and it used to be reviled. Just because it lacks the overt violence of yesterday doesn’t mean it isn’t manipulative and damaging to society.

Profits are up. So is inequality.


If Israel is "more entrepreneurial" than Germany (and it's probably not), it would be due to IDF tech leakage and the very supportive international Jewish community (that one is difficult to measure, but as this whole thread is anecdotal... I think the influx of Israeli-sympathetic money had a huge impact).


I think your perception that Germany is a lot less entrepreneurial is incorrect.

It's probably due to the fact Germany focuses a lot more on industry technology rather than consumer-facing tech.


Personal anecdote time (please correct me if I got it wrong): go to almost any backwater German village and there'll be small/mid sized industry on the outskirts. From semi-high tech (e.g. manufacturing precision instruments) to "simpler" stuff like carpentry shops or metalworkers. In Germany, the small-mid sized business that actually builds stuff (as opposed to just services) is still pretty big. Sure, most of it is invisible on the international scale, but it's there and underpins an economy of specialists.

Driving through similar places in France the difference was striking. There didn't seem to be any of this decentralized economy. Again, I don't mean to draw conclusions, just stating my very limited observation.


>Sure, most of it is invisible on the international scale, but it's there and underpins an economy of specialists.

Actually a not insignificant part of these backwater businesses are so called Hidden Champions[1]. Basically, small companies who are still leader in the world market for their very specialised product.

[1] https://en.wikipedia.org/wiki/Hidden_Champion


Yep, stuff like Nordischer Maschinenbau Rud. Baader. In the 1920s they were the first to produce a machine to automatically decapitate and debone fish, and they've been the world leader on this and related tech ever since,


What does "small companies" mean in this context ?

Do they do engineering or manufacturing?

And how could they maintain an advantage over so many others and of course over large companies ? Where's the r&d budget coming from ? And what about marketing ?


They're businesses that hyper-specialize in one area and have done so over the long-term. The markets are too small for some giant conglomerate to come in and dominate, so it gives an opening for smaller firms to dominate the global market for said good - while it won't have your next unicorn, the markets are great enough to create prosperity for the owners and the local region. Germany has this spread over the country fairly uniformly, so it creates a wide platform for economic prosperity even in rural areas.

The companies themselves are usually under 50M Euro and have under 500 employees, and export-oriented. They've been a big target for Chinese acquisition, usually for companies that don't have any family to inherit the enterprise.


Look at the data. Even within the EU, Germany is behind the level you would expect based on every indicator (institutions, education, productivity, etc.).

And this is basically a function of Germany's economic development. Germany industrialised quickly by extracting from consumers. Forced savings, cheap loans to entrepreneurs, etc. The model isn't optimised for competition and new entry.

Germany hasn't really moved on from that point. Industry and banking is still heavily concentrated (the level of corporatism is far beyond anything outside of East Asia). Capital markets still don't really exist (amazingly, given current ECB policy). Consumers are still paying a massive surplus over to the corporate sector (through low wages and forced saving).

Rocket Internet is the kind of exception that proves the rule. They were successful but only by doing something totally inexplicable in any other context (i.e. their shareholding model is a function of the awful state of finance in Germany).

Definitely, the govt have trying very hard on this for a while. But with no real results because the model seems to produce what voters want. There are signs that things are coming apart (particularly in banking) but before that point, nothing will change. It just makes no sense to compare Germany to an entrepreneurial society, that has never been the goal.


Typically, in a corrupt country, the 'take' of corrupt institutions and actors critically diminishes available (finite) Capital and distorts the distribution of what remains.

What is unusual is that Israel is the recipient of largess of the American tax payers and enjoys continual replenishment of available Capital. Enjoy it while it lasts.


Nope. Almost all US aid is in the form of military equipment, and , incidentally, 75% must be spent on US-made armaments. So it's more like aid to the US military-industrial complex.


All nations spend substantial sums of money on defense. If you don't need to spend n% of your GDP on defense (because someone else is paying for it) that is money in the pocket.


Iraq gets about the same nowadays. The US also provides $1.2bn aid to Egypt and recently committed to providing a total of $6bn to Jordan through 2022. So yes Israel gets a decent slice, but it's only incrementally more than other individual nations in the region. It's a lot smaller than overall US military and development aid to the other nations across the middle east.


Israel's GDP is $380B, so $3B-$4B is just a drop in the bucket. As other posters mentioned, that $3B-$4B is earmarked for Defense purchases which means they have to spend that money in the US.


Israel is an extremely entrepeurial society due to many reasons , both historical and current.

But beside that, there's a simple explanation: it's quite hard to earn a decent salary in Israel, without being either an Entrepreneur , or by working in a startup company.

Germany(and maybe Austria) probably don't suffer from that problem.


One possibility is that in rich countries with less corruption where people can have high-paying jobs that are not stressful and can still have plenty of personal time, the incentive of looking for alternatives (like starting you own business) is not that high. Another way to put it is that in Israel it's more of a survival culture and many people see entrepreneurship as a path out. There are many countries similar to Israel that are less innovative; this can be explained by the fact that Israel is still an advanced country with good universities and military that always needs to improve.

On the other hand, entrepreneurs are usually independent people who really value freedom and don't like to work for others. Regardless if they can find a good job or not. So I'm not sure if my first theory holds. Maybe Israelis are just more independent then the average European (which can be explained by the culture and environment too).


Investment climate is also important.

Perhaps in Europe, people are less inclined to borrow large sums of money?


That’s also conditioned by how hard it is to escape debt. In my country if you can’t pay back what you owe you turn into an indentured servant for life. No matter where you hide and what job you pick, the state will come and take most of your pay leaving you with just enough to get by.


> with just enough to get by.

I would like to say that it is not necessarily true either. I do not have to go far, I could just take a look at my mother. Funny thing is that it was not even her who asked for a loan, it was my father, but they were married. They divorced, and fought the "bank" for years to no end. My mother is still the one who is suffering from the actions of my father. She will, to her last day. It makes me sad, her pension probably will be negligible.

Regardless, my mother would not get by at all on her own. :/ She works hard physical labor which affected her health A LOT. She is working hard just so a huge percentage of her salary can be taken away for something she did not do.


If you own a store or restaurant, you might not make any money but at least your family won't starve.


Damn.. What country is this? Have you no bankruptcy protection laws?


I don't think there is a country without any sort of limited liability company. But many startup entrepreneurs will only be able to borrow money from the banks if they accept personal liability and provide collateral, guarantors, etc.

Bankruptcy protection for individuals is not available everywhere and it often comes with very onerous conditions.


Well if those are the two measures then this paper would be wrong. 5 out of the top 10 most entrepreneurial countries according to this paper is in Sub Saharan Africa where government corruption is very high and there the inclusive policies are hit or miss...mostly miss while the US is number 46 on the list. As someone that has worked in both regions, the USA is waaaay easier to do business than Sub Saharan Africa but I have seen first hand that there is more entrepreneurship in sub-Saharan Africa than the US. I feel the people just do not expect the government to provide anything, so they just do it themselves. Most people have two jobs. One for the Govt or a Cooperation and they have their own on the side


having started by-the-book (software) businesses in both Thailand and the USA I agree.

In both countries it's very easy to build/run unofficial businesses. But running a legal business is very different. In Thailand, I needed to hire a full time bookkeeper plus 3 weeks/year of an accountant just to run a 5 person business, and still needed to suffer through 2 weeks/year of government audits. In the USA, I can do everything myself (about 2 weeks/year of tax/bureaucracy overhead)


Are there any failed nations without a relatively recent (<100 years) history of economic or political exploitation by a contemporary superpower?


A more helpful way to look at it is how countries like South Korea, Vietnam, and Japan grew so rapidly in the 20th century despite active intervention by superpowers.

South Korea in 1960 was poorer than Congo, Ivory Coast, Senegal, etc. About the same as Bangladesh. Today South Korea is as rich as France.


Also Germany. At the end of WWII, Germany was bombed out, whole cities were flattened. 20 years later (according to my mom who lived there in the early 60s), you couldn't even tell a massive war had ever taken place there. Some of that was the Marshall Plan providing funding, but the rest was a society that actually pulled together and got stuff done instead of being mired in corruption or infighting. Japan was largely the same way. Meanwhile, 80 years later, America can't even keep its bridges from falling down.


There is a big difference in the intervention made by US in east asian countries, and the interventions made by superpowers in other countries.

I'm not saying that South Korea and Japan didn't make good use of this intervention, but while the intervention in those countries was more akin to a financing/investment, which was in line with US' Marshall Plan during the Cold War.

In other countries such as those from Africa/South America, it was direct exploration of people and resources without really giving something back.


There was not that sort of investment in South Korea, and of course in Vietnam the opposite happened since the communists won the war there.


Intervention without exploitation would seem to be a simple-yet-fulfilling answer. South Korea received investment instead of being ransacked for resources.


One might say because as opposed to despite?


It's far from failed, but Argentina used to be a top 10 country in the world. Most of their woes are self-inflicted.


Shuss, don't wake up HN.


The answer is a resounding yes from me.

The phenomenon cannot be more obvious when viewed at state levels in India. The Gujarati and Marwadi communities are far more enterprising than others in India. This is while the federal rules that all communities live under remain the same.

Anecdotally, the cause for this seems to neatly fall out of my conversations with friends from these communities.

There is cultural weight to being a person who doesn't work for someone else. There is cultural pride in ownership that does not exist in most others.

On the other hand, Maharashtrians seem to value being able to separate work and life. Being able to sleep without worrying about your enterprise and knowing that the same reliable amount will be deposited in your account every month is considered important.

These fundamental differences manifest even when people live under other geographical, political and economical variables.


In his very interesting book "Kicking away the ladder", the Korean economist Han Joon-Chang quotes US merchants discovering Japan for the first time in the 1860s. They all marvelled at how lazy the Japanese were. Surprising, isn't it?

Fact is that 1860's Japan lacked all sort of resources, particularly natural ones. In the absence of resources, there isn't much that you can do to bootstrap yourself. With all the workers you need and the money to pay them, you can't build a house if there isn't any timber, mortar and bricks. Therefore, you're better off simply doing nothing, or things that don't require much, like playing music and writing poetry.


I can tell you why my society isn't entrepreneurial. We basically believe everything should be hard and we frown upon people who appear to be taking short cuts. This attitude served us well before the advent of technology but now it just gets in the way. Let me give an example. As recently as 50-70 years ago we lived a subsistence way of farming. Working the land was done using a hoe with a handle that is about 40cm long. Working the fields meant a lot of time bent over. One of the neighboring tribes decided to lengthen the handle of their hoes meaning they worked more upright. Probably had more mechanical advantage. Our reaction as a tribe was to call the other tribe lazy. To this day this is how we react when something new is introduced, loads of skepticism and derision of the person who dares introduce something new. By the time we come around to embracing whatever it is all the opportunities associated with the new technology have been taken up by the very few entrepreneurs. Normal from outside the region. Off course they are exceptions but these are far and few between. We make for a great workforce and we made for a great army back in the day when tribal wars were a thing. In this modern world we are getting left behind. So I guess in a nutshell some societies probably embrace change better than others.


Always worth zooming out and considering this study that relates average temperature to economic production, claiming 13C as a sweet spot https://www.nature.com/articles/nature15725


I believe the conventionally accepted explanation for this is Acemoglu's, and it's that GDP is an Nth-order effect of climate. Warm weather -> highly productive agriculture -> landholders become extremely wealthy -> oligarchic government -> low GDP. Think of the American North and South before the Civil War, where slavery and inequality took hold in the highly agriculturally productive South but never in the North. The North wound up poor and more egalitarian, but eventually industrialized and overtook the South.

Edit: warm weather also happens to correlate with another natural resource: oil. Oil tends to produce a similar dynamic -- whoever owns the oil owns the government and badly mismanages the government for their own benefit. The exceptions prove the rule: Alaska and Norway were both established, egalitarian societies before the oil was found, in contrast with Middle Eastern petrostates, Russia and Venezuela.


Is Alaska a big outlier inside the US regarding equality? Because the US as a whole is nowhere near the level of Norway in terms of equality. As a matter of fact Russia has a lower Gini coefficient. Even in the Americas US is below Canada, Uruguay, Argentina among other and almost parity with Venezuela.

The problem in Venezuela is that the state has been weak and ineffective. Weak != Small, you have this suffocating bureaucracy which does nothing.


Oil today, or fertile agricultural land 150 years ago, doesn't make government big or small. It just frees whoever controls the natural resource from accountability to others and lets them do whatever they want to do. Putin wants to run a superpower, so he pours the oil money into a bigger defense budget than Russia's GDP justifies. Maduro is (notionally) a socialist and pours the oil money into a bloated bureaucracy.


Counter-point : Russia.


> The exceptions prove the rule: Alaska and Norway were both established, egalitarian societies before the oil was found, in contrast with Middle Eastern petrostates, Russia and Venezuela.


Is this going to be a new Montesquieu's climatoethnic justification for racism?


What does it have to do with race? Aren't there people of every race in every climate?


The proportions of people with brown/black skin tend to increase as you approach the equator.


It’s a pretty obvious genetic adaptation to dealing with varying levels of sunlight. You even see it in the Americas which (presumably) is based off a relatively recent, smallish founder population


I think it has something with redemption and new identities. I think societies that allow reboots lead to greater risk taking.

Also capital and risk distribution. I visited Amsterdam and was interested in their history and how it took off after the invention of the corporation.

Corporations can end and the knowledge from them can go into a new venture (redemption). They can also raise capital through distributed ownership and distributed risk.


> I visited Amsterdam and was interested in their history and how it took off after the invention of the corporation.

I wonder if anyone has written a history of the Dutch economy that can be also accessible to non-Dutch readers (i.e. translated to either English or French or Spanish). From a very outside view (i.e. mine) the Dutch used to be a very entrepreneurial society/people in the 1600s going into the 1700s, but it seems that by the 1800s that spark had gone. They're of course still one of the most developed nations in Europe and in the world, but it looks like in terms of risk-taking they're the same as us, the rest of the Europeans, i.e. behind the Americans and I'd say even the Chinese.

As a similar example the Italian economic historian Carlo Cipolla was blaming the wars and the associated pests/famines of the early 1600s for Italy's towns' fall into economic irrelevance. Not sure if they're easily accessible on the Internet, but in one of his books [1] he presents some charts where the population of entrepreneurial Italian cities of that time such as Firenze, Venice, Brescia, Lucca or Bergamo felt by more than 50% during 1600-1630 (give or take), which caused them not to be able to compete against Flemish and especially English clothes-related industry. I wonder if anything similar happened to the Dutch.

[1] https://www.amazon.com/Before-Industrial-Revolution-European...


As an American transplant to Amsterdam, here's my take:

The Dutch have embedded innovation/entrepreneurship so deeply into their society, it looks very different from American-style innovation. There are so many little innovative things here that startups would never get to. It is continuous, but not relentless -- as in, it occurs within the paradigm of working hours. Further, it tends to reflect the systemic intelligence of organizations, at a large and small scale.

Example Domains:

Transportation (all aspects), payment (online and off), festivals (incredibly innovative!), road construction, garbage pickup (yes! It's so futuristic!), child care & education, psychology, medicine...

In any of these areas, I can readily think of smart innovations that would impress Americans. The innovations are not of the "Uber for X", digital startup-based type. So, seeing the lack of Dutch statups in VC portfolios might suggest a less innovative culture. Here, entrepreneurship often occurs within the context of existing systems and organizations. It's a different, complementary way to think about things -- I rather like it.

Also, there are only 17 million people in the Netherlands. It's a much smaller market and startups that successfully capture this market don't necessarily transfer to external markets.

Further, when things are working really well, there isn't always a need for disruption... Nevertheless, things in the Netherlands never seem "done". Sure, there is great transportation, healthcare and education -- but that's because they are always ripping it up and building the future of it. Sometimes in the States, things can seem like we are just trying to keep the status quo from falling apart too badly.


> "garbage pickup (yes! It's so futuristic!)"

Is our garbage pickup futuristic? It's certainly efficient and practical (which are probably the most important and most typically Dutch values), but there's nothing about underground containers that's out of reach for other countries.

I think much of our innovation and efficiency is actually in government organisations, from garbage pickup to our efficient and well-maintained infrastructure (you really notice the road quality drop when you cross the border with Belgium or Germany), to our 'polder model': talks between government, employers and labour unions to decide on employment standards that everybody can agree to so we won't have any strikes.

It's true that we don't have the kind of startup culture that California has, despite attempts from the government. I'm not sure why, but then again, even in the 17th century, our big innovation was the invention of the multinational, globe-spanning corporation, not the small startup. And a big part of the innovation there was not so much the risk taken, but the way those risks were mitigated: financial products that spread the risk around. Many ships at the time were funded were funded through a system of life insurance.


> It's true that we don't have the kind of startup culture that California has, despite attempts from the government.

I've been part of an Amsterdam startup and 'started' my own companies with various people a few times, and my impression is that there are a few reasons for this:

1. much as it's easy to start a company, it seems difficult to get funding. The government seems to be trying, but it still feels less than what I read about SV (or at least SV in the past?).

2. the market is much smaller. once you need to deal with other countries with other languages, (tax) regulations that are often much more complicated and bureaucratic, cultural differences, etc., things get much more difficult, and I've noticed multiple small startups around here just don't bother.

3. for tech startup type workers at least, but probably for most workers here, there's less of a culture of jumping into a startup. we like our steady jobs, we are quick to complain about overwork, and there's all sorts of (good) protections that possibly make it more difficult to find employees and grow.

In regards to 3, the startup I worked for consisted of a just-out-of-school programmer, a wealthy-and-connected but inexperienced CEO, and a fantastic and experienced designer who, in his forties, decided to do something 'risky' and 'new'. He also came from wealth but had done very well for himself too. and later a social media/marketing person who was just out of college.

So the startup either involved people who could put it on their CV regardless of how well things went, or people who could afford faffing about for a while. I suppose I was in the latter camp, although that's more because I just don't spend much money and make enough as a front-ender currently that I can do 'cool' things without much skin in the game.


> It's true that we don't have the kind of startup culture that California has, despite attempts from the government.

Consider the sheer amount of government funding it took for Silicon Valley to become possible, before any other factors. Among other factors it took decades of massive military funding for the radio and semiconductor industry to lay the foundation and attract the talent that would later branch out.

The biggest barrier to replicating this is government willingness to pour that kind of money into tech in a single area.


Trashmen collecting garbage with an Xbox controller and giant claw? In a neon jumpsuit? Yes. That's futuristic.

I hope NYC adopts the system. I agree, it is totally within reach.


Watch out for a scaling fallacy.

If the Dutch are just as entrepreneurial as Americans, then there will be way more successful Americans and American companies because the USA is so much bigger. Ditto for China. You'd really need to calculate "successful entrepreneur per 100,000 people" or something like that.

Also, selection bias. You're on a tech website. Switching to Denmark for a second, the Danes are incredibly ahead and successful in the wind power industry. How many people think of Denmark as a tech centre? Probably not many. We focus on software and there, one or two regions of America have done extremely well so we give it more attention.

That said, I do believe Europe and the EU in particular is discouraging innovation and entrepreneurialism at a pretty staggering rate. The Vestager rulings send a loud message that the EU considers hurting competitors to be anti-competitive behaviour (vs harm to consumers). That's a pretty big disincentive to work hard to get big.


> considers hurting competitors to be anti-competitive behaviour (vs harm to consumers)

Read up on SEC decisions (including the AMD vs Intel one) and you'll see similar lines of thought

Because in the end hurting competition is hurting consumers. Like in MS actions against BeOS


>You'd really need to calculate "successful entrepreneur per 100,000 people" or something like that.

Even that wouldn't be enough, because the supporting apparatus and immediate market for a Dutch entrepreneur would be still very much smaller than for a US based on - so Dutch entrepreneurs should expect less support and not as good environment for their steps to grow their company, even if as a ratio there are e.g. twice the Dutch entrepreneurs for 100,000 people compared to the US.

>That's a pretty big disincentive to work hard to get big.

That sounds good. Now if we (EU) could also prevent other countries from having corporate behemoths that would be perfect...


You're assuming you can know (or rather, that a bureaucracy can know) what the 'correct' size for any given business is.

Google is a medium sized company by many measures. There are companies with far more employees, offices, and physical footprint for example. Who are you to say that this company is a "behemoth" but for example Volkswagen ($221 billion of yearly revenues) is not? Where is the line drawn?

I think a lot of entrepreneurs are motivated by the thoughts of huge success. If a government says that success will be punished the moment two-bit competitors complain (as e.g. tiny websites that nobody ever cared about complained about Google Shopping), then why set out on the arduous journey to create a big firm?

AMD vs Intel is different. In cases like that, it's obvious how to avoid problems: don't pay companies to not use your competitors. That seems reasonable.

But with something like Google Shopping vs companies so small and worthless that the EU's press release doesn't even bother to name them (nor does Wikipedia's page on the case), it's not at all clear what lessons entrepreneurs should draw. Don't add features to your own product? Don't be too successful? I followed all three cases closely and frankly to me the enforcement looks arbitrary and vindictive (and yes I'm an "EU citizen"). The Commission decided - entirely arbitrarily - that Google Shopping must be the dominant way to buy things online, which will come as news to people who use Amazon or Ebay or European equivalents like Zalando.


>You're assuming you can know (or rather, that a bureaucracy can know) what the 'correct' size for any given business is.

No, I assume I know what kind of businesses I prefer to deal with, and that is smaller...

>Google is a medium sized company by many measures. There are companies with far more employees, offices, and physical footprint for example. Who are you to say that this company is a "behemoth" but for example Volkswagen ($221 billion of yearly revenues) is not? Where is the line drawn?

Wherever the people and their votes/laws want to draw it, with as many exceptions to the rule as they like?

>I think a lot of entrepreneurs are motivated by the thoughts of huge success. If a government says that success will be punished the moment two-bit competitors complain (as e.g. tiny websites that nobody ever cared about complained about Google Shopping), then why set out on the arduous journey to create a big firm?

Well, then don't. That's fine by me (people not setting out "to create a big firm"), and would be totally OK in my perfect world.

Now those are personal preferences. But ,y main point is not communism but democracy: people being asked, and being able to decide and set course for the society they like.

As opposed to letting the "laws of historical materialism" (communism), the fuhrer (fascism), or "the invisible hand of the market" (capitalism) decide for them...


In practice the EU's competition mechanisms aren't based on votes and the people have no influence over it. But people can choose who to do business with, as you observe. Apparently all those people's decisions added up led to Google being its current size. The invisible hand is really just a way of saying "people voting with their wallets". It's not perfect, but it's better than Vestager being judge, jury and executioner.


>but it seems that by the 1800s that spark had gone

I'd say the spark is doing just fine, but it ignited a blaze that swept much of the rest of Europe, and the New World. The innovations that Holland rode to success just aren't uniquely Dutch anymore, so now they're back to competing on an even playing field.

The same happened to England after the industrial revolution. Once the new techniques spread to Germany, the US and elsewhere their special utility to the UK wasn't so special anymore.


I agree 100%. Also, fun fact: the Netherlands had the first stock corporation ever: “east India trading company”


Allegedly there were isolated precursors before the Netherlands, namely in Toulouse. Granted it really took off in the Netherlands. It seems the concept was invented independantly serveral times.

http://blog.yalebooks.com/2015/08/11/the-worlds-first-corpor...

https://qz.com/219270/bazacle/

https://en.wikipedia.org/wiki/Bazacle_Milling_Company

https://www.sciencedirect.com/science/article/abs/pii/S03044...


That’s a fascinating story. That’s how I learned of it because the wallpaper in my hotel bathroom was in English and French and Dutch and had these factoids about Netherlands. One was the stock corporation thing and the stock exchange.

Sadly the east India trading company resulted in untold millions of death for people on the wrong end. But it made a lot of money.

Another bit I learned was how the Dutch stopped Napoleon by flooding their country.


It's just a culture thing. My neighbors are Lebanese, almost everyone in the family either owns a store, or works for one of the other people in their store. Only a few of them have 9 to 5 jobs not related to the family.

They help each other out, you can use my van to pick things up, you can use the corner of my store to start your own store, etc.


My wife is Chinese and Chinese people are the same way. Families treat resources in a much more communal way than my UK family, but also outside the family networking and personal social bonds are crucial to getting things done and finding new business opportunities.

I suspect this is how it is across most of the world though. If you can't rely on 'society' and particularly the government or legal system, you find ways to rely on each other instead. In the 'developed world' those social bonding muscles have atrophied away.


There's a danger of only seeing the portion of the culture that left their country with the intent to start a business.

I see a decent number of Japanese businessmen where I am. I know they're not at exactly representative of Japan. They're part of companies that thought investing in Silicon Valley would be a good idea and were willing to move here.


You just "proved" that it's a family thing.


Why startups condense in America? http://paulgraham.com/america.html


This is a topic that's particularly interesting to me because there's an ethnic group in my country - the Igbo - that are so pervasively, aggressively[0] entrepreneurial that it's become a meme. I can't really think of another culture that has business woven as tightly into its very bones - I haven't read the entire paper yet, but I'm curious to see if it mentions them at all.

[0] In a good way. Several people have noted that the Igbo pretty much invented venture capital.


The Igbo are an example of a merchant minority, like both Ashkenazi and Sephardi Jews, Armenians, Parsis and the Chinese in Southeast Asia, Lebanese in West Africa, Latin America and elsewhere and Yankees in the US South. There’s always hostility to merchant minorities from the majority population but the degree of difference modulates the hostility. No Yankee enclave was ever burned in a pogrom in the South whereas Jews everywhere in the Old World, various Christians in the Ottoman Empire and the Chinese in SE Asia all dealt with those regularly enough. The Igbo tried to secede from Nigeria after independence and it was an utter bloodbath.

We know this is at least partly cultural because genetically Turks in Turkey are over 90% Greek or Armenian with some additional Balkan and Caucasus contribution and after mutual ethnic cleansing rid Turkey of Christians and the rest of the Balkans of Muslims Turks eventually filled those socioeconomic niches. Until Erdogan it looked like Turney would be richer than Greece pretty soon.

Any Chua wrote a great book on merchant minorites, World On Fire.


Wikipedia articles *do very little to accurately convey cultures/situations one doesn't actually have experience with. The clear majority of Igbo people live in their homeland in Southeastern Nigeria. Even with the quarter to a third of Igbos that live in other parts of Nigeria I find the Western arrogance in calling people living in their own country a "merchant minority" rather dull.

(For more context, there are three dominant ethnic groups in Nigeria, and none of them form a majority. The largest group - the Hausa - doesn't make up even 30% of the population, and the Igbo make up over 20% in current estimates)

> The Igbo tried to secede from Nigeria after independence and it was an utter bloodbath.

This was far, far more complicated than is being made out here.


I’m sympathetic to the claim that it’s complicated, most things are, but the Igbo are clearly a merchant minority, and they’ve clearly been subjects of mob mass killings, aka pogroms as well as government sponsored mass killings based on their ethnic identity. Like every other merchant minority they also emigrate disproportionately looking for economic opportunities. If you guessed the ethnic makeup of Nigerians based on US or British populations you’d think Igbo were at least half of the population, not a minority.

https://en.wikipedia.org/wiki/1966_anti-Igbo_pogrom

The 1966 anti-Igbo pogrom was a series of massacres committed against Igbo people and other people of southern Nigerian origin living in northern Nigeria starting in May 1966 and reaching a peak after 29 September 1966.[1] These events led to the secession of the eastern Nigerian region and the declaration of the Republic of Biafra, which ultimately led to the Nigeria-Biafra war . The 1966 massacres of southern Nigerians have been described as a holocaust by "Greene -1975 . The Struggle for Secession 1966–70: A Personal Account of the Nigerian Civil War by N. U. Akpan. The Nigerian Civil War 1967–70. The Royal African society in January 1975 and others have variously been described as genocide.

https://en.m.wikipedia.org/wiki/Nigerian_Civil_War

Persecution of Igbo Edit From June through October 1966, pogroms in the North killed an estimated 80,000 to 100,000 Igbo, half of them children, and caused more than a million to two million to flee to the Eastern Region.[77] 29 September 1966, was considered the worst day; because of massacres, it was called 'Black Thursday'.[78][79]

Ethnomusicologist Charles Keil, who was visiting Nigeria in 1966, recounted:

> The pogroms I witnessed in Makurdi, Nigeria (late Sept. 1966) were foreshadowed by months of intensive anti-Ibo and anti-Eastern conversations among Tiv, Idoma, Hausa and other Northerners resident in Makurdi, and, fitting a pattern replicated in city after city, the massacres were led by the Nigerian army. Before, during and after the slaughter, Col. Gowon could be heard over the radio issuing 'guarantees of safety' to all Easterners, all citizens of Nigeria, but the intent of the soldiers, the only power that counts in Nigeria now or then, was painfully clear. After counting the disemboweled bodies along the Makurdi road I was escorted back to the city by soldiers who apologised for the stench and explained politely that they were doing me and the world a great favor by eliminating Igbos.


> the Igbo are clearly a merchant minority

Do you actually have anything to back this up that isn't a cursory read of Wikipedia? Who exactly of the over four hundred ethnic groups in Nigeria do you think is the majority to the Igbo "minority"? How on earth are you classifying populations in diaspora to people who, again, are living in their own country?

> they’ve clearly been subjects of mob mass killings, aka pogroms as well as government sponsored mass killings based on their ethnic identity

Ethnic discrimination does not automatically equal "merchant minority" (or a minority at all, in fact). The ethnic discrimination against the Igbo in Nigeria is a more complex situation than "foreigners bad" or "minorities different"; it's rooted more in colonialism than in anything else. Which is understandably difficult for people in the West to understand, but it would probably be easier if they stopped trying to fit everything into the boxes they know and actually engaged with what was before them.

> If you guessed the ethnic makeup of Nigerians based on US or British populations you’d think Igbo were at least half of the population, not a minority.

And the other half would almost entirely be Yoruba, but I don't see you leaping to call the Yoruba a merchant minority.


The Igbo may have many different subgroups but they’re conscious of their own existence and other groups are conscious they exist. I’m sure there are liminal groups who are Igbo enough to be discriminated against in Hausa or Fulani areas but different enough that in majority Igbo areas they wouldn’t be considered “real” Igbo. Having fuzzy boundaries doesn’t disqualify an ethnic group from existence or we wouldn’t have any. This consciousness marks them as different and in areas where they’re a minority that makes them a minority.

They’re also clearly disproportionately involved in commerce. As you said

> there's an ethnic group in my country - the Igbo - that are so pervasively, aggressively[0] entrepreneurial that it's become a meme.

If they’re a minority that’s disproportionately involved in trade that makes them a merchant minority.

They also have non-central features of being a merchant minority, like being subject to pogroms but as I said previously Yankees are another example which were never subject to that experience. In Ireland the Protestant minority used to fill a similar role.

> And the other half would almost entirely be Yoruba, but I don't see you leaping to call the Yoruba a merchant minority.

If the Hausa, Fulani and Yoruba had been put into one state by the British, the Igbo had not abc there was enough inter-state hostility to prevent migration the Yoruba would be that *Nigeria’s merchant minority. The Yoruba are clearly more commercial than either of the other groups. But that didn’t happen and the Igbo are Nigeria’s merchant minority.

Classification as a merchant minority is a matter of degrees. Protestants in Ireland, Yankees in the US, Germans along the historic borderlands with the Slavs, all of these groups were a lot more involved in trade than the majority popular but they also engaged heavily in primary production. Classic merchant minorities like Jews, Armenians or Parsis didn’t. Igbo are clearly closer to the first group than the second in those areas where they’re a majority.


Have you considered that looking up things on the Internet is not exactly a suitable proxy for actually having experience with a situation? When I mentioned Western arrogance, I wasn't anticipating that I was going to run full-tilt into it immediately.

> The Igbo may have many different subgroups but they’re conscious of their own existence and other groups are conscious they exist.

I don't quite see how that has anything in the slightest to do with what I said - I mentioned nothing about fuzzy boundaries, and what you are "sure of" unfortunately (or fortunately) has no actual bearing on what is real. The barest real knowledge of Nigerian history would have informed you that the Igbo have been in the north of the country for less than a hundred years, which is pretty much no time at all when talking about ethnic groups.

> As you said >> there's an ethnic group in my country - the Igbo - that are so pervasively, aggressively[0] entrepreneurial that it's become a meme.

If you did not understand what I said, you might as well have said so rather than go on a Wikipedia binge to seem knowledgeable. That statement was referring to the society-wide master-apprentice system that the Igbo have, undeniably capitalist but inherently prioritizing the success of the collective over the success of the individual.

> If they’re a minority that’s disproportionately involved in trade that makes them a merchant minority.

They are not a minority, but I am rather tired of trying to explain that to somebody who apparently thinks US/European-type demographics are the only kind that exists. How, exactly, do you call one of three major groups that each make up twenty-something percent of a population a minority without falling over the cognitive dissonance?

> They also have non-central features of being a merchant minority, like being subject to pogroms

They were not subject to pogroms because they were a "minority", jesus christ. The '66 pogroms in Northern Nigeria were part of a countercoup in disproportionate response to a coup d'etat earlier the same year which had ended the lives of (amongst others) two especially beloved Northern political leaders - Prime Minister Tafawa Balewa and the Northern premier/Sokoto's crown prince Ahmadu Bello - and placed Easterners in power instead. The pogroms and the ensuing civil war, which Western Nigeria took opportunistic advantage of, were largely an attempt to reconsolidate power in the North.

Oh actually never mind me, it was just "'minorities' bad" and not a complex political situation in a newly independent country.

> But that didn’t happen and the Igbo are Nigeria’s merchant minority.

Or consider that of the Igbo are not among the ethnic groups in Nigeria that could possibly be called merchant minorities - but that would actually require knowing more than a quick Google about the country. For example, it's rather clear that you're unaware of the history between the Yoruba and the Hausa both prior to and during the colonial era, or that the Fulani are an actual minority ethnic group both in Northern Nigeria and in the country as a whole and would actually be fairly classifiable as a "merchant minority" if we cared to apply political labels made for populations in diaspora to people living in their own country - the Fulɓe are semi-sedentary, widely dispersed, tend to live in ethnic enclaves, and have formed several ethnic subgroups throughout West Africa due to integration with clear majority populations.


>> The Igbo may have many different subgroups but they’re conscious of their own existence and other groups are conscious they exist. > I don't quite see how that has anything in the slightest to do with what I said - I mentioned nothing about fuzzy boundaries, and what you are "sure of" unfortunately (or fortunately) has no actual bearing on what is real. The barest real knowledge of Nigerian history would have informed you that the Igbo have been in the north of the country for less than a hundred years, which is pretty much no time at all when talking about ethnic groups.

You spoke of Nigeria’s 400 ethnic groups as if this was dispositive of the Igbo existing. Having subgroups does not mean the Igbo do not exist. Being in what is now Nigeria for less than a hundred years is equally irrelevant.

> As you said >> there's an ethnic group in my country - the Igbo - that are so pervasively, aggressively[0] entrepreneurial that it's become a meme. If you did not understand what I said, you might as well have said so rather than go on a Wikipedia binge to seem knowledgeable. That statement was referring to the society-wide master-apprentice system that the Igbo have, undeniably capitalist but inherently prioritizing the success of the collective over the success of the individual.

If you meant to write something different that’s fine but what you wrote is obviously true. Without regard to master apprentice models the Igbo do more buying and selling as middlemen, whether in wholesale or retail trade than other Nigerian ethnic groups. They are more educated and set up more businesses.

>> If they’re a minority that’s disproportionately involved in trade that makes them a merchant minority.

>They are not a minority, but I am rather tired of trying to explain that to somebody who apparently thinks US/European-type demographics are the only kind that exists. How, exactly, do you call one of three major groups that each make up twenty-something percent of a population a minority without falling over the cognitive dissonance?

It’s entirely possible for a state not to have a majority ethnic group. That means all ethnic groups are minorities. If one of those groups is disproportionately mercantile they’re a merchant minority. If they’re disproportionately likely to enlist in the military that makes them a military minority. The Hausa are way over represented in the Nigerian military compared to their share of the population, like Southerners in the US. They’d be a military minority.

>> They also have non-central features of being a merchant minority, like being subject to pogroms

>> They were not subject to pogroms because they were a "minority", jesus christ. The '66 pogroms in Northern Nigeria were part of a countercoup in disproportionate response to a coup d'etat earlier the same year which had ended the lives of (amongst others) two especially beloved Northern political leaders

>> Oh actually never mind me, it was just "'minorities' bad" and not a complex political situation in a newly independent country.

A complex political situation in a newly independent country is entirely compatible with pogroms. People were killed for being Igbo in large numbers, by civilians and the state. This happened in part because of the assumed political loyalties of Igbo people. I imagine we can both agree on that.

> But that didn’t happen and the Igbo are Nigeria’s merchant minority.

> Or consider that of the Igbo are not among the ethnic groups in Nigeria that could possibly be called merchant minorities

Then which ethnic groups are better candidates? Is there a group that is almost entirely engaged in trade with minimal involvement in primary production, and that does so for the market when it does?

> For example, it's rather clear that you're unaware of the history between the Yoruba and the Hausa both prior to and during the colonial era, or that the Fulani are an actual minority ethnic group both in Northern Nigeria and in the country as a whole and would actually be fairly classifiable as a "merchant minority" if we cared to apply political labels made for populations in diaspora to people living in their own country - the Fulɓe are semi-sedentary, widely dispersed, tend to live in ethnic enclaves, and have formed several ethnic subgroups throughout West Africa due to integration with clear majority populations.

The Fulani are a terrible candidate for a merchant minority. They’re pastoralists who are widely dispersed across West Africa because they kept on conquering other people as nomads who can move their wealth and people large distances in short amounts of time are wont to do. Semi-sedentary herders of cattle, some of whom have settled permanently in towns, with insignificant numbers of settled farmers of crops are not merchant minorities under any understanding of the term. Even less so when they were the pre-colonial ruling class in the areas of Nigeria where they’re a minority. And being in one’s own country is hardly dispositive of being a merchant minority. The Armenians in the Ottoman Empire and Jews in inter-war Poland were merchant minorities in their own countries. If the Igbo were predominantly concentrated in their own country they’d be a merchant majority there, like Jews in Israel.


Tribes: How Race, Religion and Identity Determine Success in the New Global Economy -- https://www.amazon.com/Tribes-Religion-Identity-Determine-Su...


Most important reasons -

1. Do you tolerate failure? Is it treated as a learning step or are you marked for life ( huge stigma in some societies,IMO America does this better than anyone else.).

2. Individual vs Group Think ( lots of societies don't tolerate people who think differently, frequently ostracized or outcast).

3. Capital

4. IP protection

5. Immigration Policy - Do you allow immigrants in? Immigrants are hungry, they come with nothing, expect nothing and have huge appetite for risk.


A day or two ago there was a comment on HN about the differences between eastern and western societies regarding entrepreneurship and/or motivations (the west is driven by events while the east is driven by its location). I am pretty sure there's a link between that comment and that submission but I can't find the original comment at the moment.


Nations developed different set of laws. Nations with simpler laws make it simpler to take risk. To run business means take risk, but you will never win if you have state as your enemy.

I say this from experience, was living in both over bureaucratised country with such complex regulations that even bureaucrats could not follow. In such country your business relies on mood/honesty of public servant who handles you. I was also living in the country where I have not heard from state for 7 years while I was running my business there. I was paying my fair share of taxes and state was not throwing roadblocks under my legs.

After a bit of thinking I'd also stress out how important juridical system is. If you have to wait 10 years for ruling you will be definitely more risk averse.


The paper argues the opposite explicitly. From the abstract: "Rather, the evidence shows that the strongest predictors of cross-national variation in entrepreneurial activity were normative, with social norms being the most strongly associated with entrepreneurialism and rates of organizational founding."


Well, great :) my experience shows something else :)


In the last few years I had the chance to live in Amsterdam, Buenos Aires, Perth, Sofia and Tel Aviv

From all of those cities Amsterdam and Tel Aviv a lot more innovative and the number of entrepreneurs was high (at least felt like it)

I think that there are few criterions that a city need to have to become a tech hub

- Relatively small city - Society who worship startups and entrepreneurs - Many Programmers and engineers (In Israel every 4 months few hundred talented programmers are releasing from the top units in the Israel Defence Forces, bringing high quality manpower to the ecosystem)

There are probably more criterions, those are just few I thought about now


IDF is a great Israel’s advantage. This high quality manpower is not only highly qualified, but also understands hierarchy and is not afraid to take responsibility when needed. The same is valid for Switzerland and their mandatory military service. University cannot replace army.


Unlike IDF, the army is only mandatory for men in Switzerland. A lot of men are also doing alternative services (civil service or civil protection) instead of the army. In 2008 [0], only ~65% of men was declared fit for the military during the recruitment process (on 38.597 young people).

IMO I wouldn't conclude that the "high quality manpower" is due to the half of the half of the population.

[0] - https://web.archive.org/web/20110724085052/http://www.vtg.ad...


I don't understand the down votes (maybe they are anti-Israel?). Heck, I'm pretty libertarian but see the value in a mandatory military service. There's many lessons to be learned in an environment like that including how to effectively work together, take initiative as well as the lifelong relationships you create.


Doesn’t mandatory service violate the Non-Agression Principle[1]? It is after all coercive by definition.

[1]https://en.m.wikipedia.org/wiki/Non-aggression_principle


The Non-Aggression Principle has its limits, mainly that we humans are by nature self-centered and tend to short-term, me-focused thinking; we therefore sometimes need to be compelled to do things we don't want to do, sometimes for our own good and sometimes for the good of the society that provides us with the opportunities to do what we do want to do. By analogy, parents know better than young kids what's best for them and for the family; likewise, for some things (I stress some), individuals probably aren't the best judges of what's best for us personally, let alone for the society as a whole that provides the framework for our individual choices.


I wouldn't call the analogy between states and parents insane, but I also wouldn't call it libertarian. In fact it may be the exact opposite of libertarian.


Certainly not libertarian, and I would argue that it should be troubling to anyone who values civil liberties.


I don't claim that it's libertarian. Libertarianism, at least as I understand it, is too simplistic. Personal liberty is of high value, but it shouldn't be made into an idol.


Yes, which I one of the reasons I'm still against it. Just acknowledging the potential upsides.


Hot take, but the data for this study comes from the Global Entrepreneurship Monitor (GEM https://www.gemconsortium.org/), which has been repeatedly beaten to death in the literature (that is, used as a primary data source).

I'm not saying that she doesn't add anything that hasn't already been published, I don't know if I see it though.


Just to add a little context, one issue she ignores entirely is the relationship between needs based entrepreneurship and the total entrepreneurial activity (TEA) rate. So, one of the effects you're going to run into are that the countries with the highest TEA rate are going to be 1.) developing economies (which have higher needs based entrepreneurship) that 2.) have reached a high enough development level to have functioning university systems and 3.) are in the process of adopting western-culture norms.

As a result, all of the traditional determinants of entrepreneurial activity, such as capital availability, education infrastructure, &c... aren't going to matter that much because her DV only measures total entrepreneurial activity (e.g., person A opens a street stand because they don't have any other way of generating income) or variables that are heavily correlated with TEA, which isn't what most folks are really interested in when they talk about entrepreneurship.

However, her sample is also going to be biased in favor of developing countries that have higher levels of normative western-culture beliefs (e.g., support for gender equality), because developing countries with university systems sophisticated enough to know about & participate in a project such as GEM (and generate good data) are also more likely to have already started the process of incorporating western norms into their culture.

Gender equality is a massive value added, and I know a lot of people who have done actual research which proves it. But, you can't run a couple of regression models on GEM data and declare that capital access, geography, education, and all of the other traditional determinants of entrepreneurship aren't influential.


3.) are in the process of adopting western-culture norms.

Could you expand on this point? What does it include outside of gender equality. The idea that this is a "western-culture norm" seems slightly misleading in the sense that gender equality in the workplace was much earlier and better developed in communist countries that would usually be contrasted with "western culture" albeit of course also originating in Europe.


I think it's mostly down to human nature. People are tribal. If there's more people around one who are risk taking and trying to innovate, then others feel also more inclined to go down this path, whereas if there's almost nobody around one to do their own startup, then other people will also be less likely to do it, because noone wants to be alone in their risk taking.

It's seen everywhere in life and starts with kids. When you have one kid alone, he/she is less likely to jump of a 10m cliff, but if you have a group of kids who all jump into the water then others will follow. It's the same with adults, except you replace cliff jumping with risk taking/innovation/startups.

I base that opinion, because I've seen a lot of friends/family who come from a very risk averse culture/country move to a different place and then instantly change their attitudes as they see that it's more normal elsewhere and therefore they acustom to the thinking that it's more normal and ok to do it.


Someone once observed / joked that it may be a result of natural selection:

A lot of the people that left the proverbial Old World for (e.g.) the US were often the most hopeful, so that's why the US is (stereotypically) optimistic. The people that stayed behind were the ones that were more dour and/or laid back.


Those who left were the most at risk of persecution, starvation or disenfranchisement (due to the shrinking amount of wealth to be inherited, similar to how half-nobodies congregated around Norman adventurers to invade England or Italy).

The religious upheavals following the Reformation and the insane demographic growth following in the wake of industrialization drove the settlement of overseas colonies, not ethereal qualities like optimism and entrepreneurship.


Hm, sounds interesting but looking at rates of entrepreneurship in Fig 1. amongst the top are (you can't really tell because they are so jammed together): Vanuatu, Yemen, Cameroon, Zambia, Uganda...I am not sure how smart it is reason about entrepreneurship in a developed economy against these nations (and the difference between rates within this chart suggest to me that most variance is going to be a function of income level).


I wonder if the overall level of life risk influences entrepreneurship? Two places mentioned often on this page are America and Tel Aviv, both risky places to live. America has no health care, many gun deaths, etc. Israel similarly has a history of suicide bombers, rocket attacks, etc. If you think you might die anyway, why not take a chance on starting a company?


This reminds me of an old adage that you could hear in Italy, which goes something like this:

Italy: constant war, killing, etc, and we produced the Renaissance, Leonardo and Galileo, Music, art, etc;

Switzerland: 500 years of constant peace, and all they invented is hemmental an nice watches.


Anyone find it strange how few tech startups come out of Seattle despite all the tech workers? It is the land of the big tech co and big tech co satellite offices, and can think of few actual startups and believe it comes in low as far as VC dollars go (will find source)


I don't have any proof or even tangible evidence of this, but anecdotally I wonder if, even though Seattle has a lot of tech workers, they're a self-selecting population of tech workers who don't want to be entrepreneurs.

I'm in Seattle, and I've worked at Microsoft, Amazon, and a couple of smaller companies, and I've run across quite a few people who could've gone to either Seattle or the Valley, and deliberately picked the former because they didn't want to participate in the startup rat race and just wanted a stable job.

And of course, this trend would be a positive feedback loop over time: the more the Valley is associated with entrepreneur culture and Seattle is not, the more that potential entrepreneurs go to the Valley and the day-jobbers go to Seattle, which reinforces the original perception.

Again, this is all guesswork, but it does line up with my anecdotal experience.


I'd say it has to do with these three points:

- Ownership of IP: IP produced in your own time on your own equipment doesn't belong to your employer.

- Non-competes: Not enforceable in CA

- Access to capital: Plenty in CA.

I'd say the first two points are what differentiate Silicon Valley from the rest of the tech capitals.


Ok but fairly certain NYC and Boston attract multiples more VC dollars as well vs Seattle, and at least can think of far more startups out of those cities than Seattle. I don’t think it’s just a state specific thing.


It's about a balance in stability.

Look at state capitals in the US as compared to commercial cities as an example. In general, big populations of people with high security (ie. .gov workers) and contractors to the same equal stable, but boring places.


You a word.


Could somebody explain the conclusions in lay-mans terms please?



Because some societies have the concept of limited liability and bankruptcy protections.


Could somebody explain the conclusions in laymans terms?


The author contrasts two different types of explanation for entrepreneurship -- institutional or cultural. "Institutional" means that the country has institutions that make entrepreneurship easy. The author argues that these are not sufficient, and that the key difference is social norms.


Oliver Williamson and the "New Institutional Economics" school came up with a four-layer model explaining that real-time/day-to-day economic activity is influenced by contracts (time frame: months to years) which in turn are influenced by institutions, laws, etc. (time frame: years to decades) which in turn are influenced by things like culture and religion (time frame: centuries).


They have leisure capital.


The submitted url just copy/pastes the abstract from the paper. Here’s where it lives:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3449762


The paper does not seem to have any of the data intact. It just says "Insert figure 1 here", etc. Perhaps I'm missing something, but it doesn't seem very useful as it is. The paper makes some claims, but I found it very difficult to follow the reasoning.


> It just says "Insert figure 1 here"

This is how virtually every pre-print is formatted. Scroll to the bottom and you will find all of the tables & figures.

Laying out the paper is for the journal to do.


That's standard practice for working article drafts in management & the social sciences. I can't find a link to her data set & reproduction code - I would be surprised if she had it, tbh, because it's unfortunately not really a requirement in this field - but the data itself should be easy to assemble yourself.

Entrepreneurial Activity: GEM (https://www.gemconsortium.org/)

Country Level Vars: World Bank Dataset & Project Globe (https://globeproject.com/)

The models are panel regressions w. fixed effects in Stata (you can recreate this with the PLM library in R).


Without reading the article, some ideas that come to mind are:

-differing culture making it more or less likely for someone to go down that road and making it more or less acceptable by others.

-differing legal frameworks that make it easier or more difficult to pursue entrepreneurship and make a living from it.




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