The Influence of Socio-Cultural Environments on the Performance of Nascent Entrepreneurs

2012

Ute Stephan

The importance of informal institutions and particularly culture for entrepreneurship continues to attract attention. Past research mostly concentrates on cross-national comparisons, cultural values, and direct effects of culture on entrepreneurial behavior, but finds by and large inconsistent results. The present research adds a fresh perspective to this research stream by turning attention to community-level culture and cultural norms. We hypothesize indirect effects of cultural norms on venture emergence. In particular, community-level cultural norms (performance-based culture and socially-supportive institutional norms) impact important supply-side variables (entrepreneurial self-efficacy and motivation) which in turn influence nascent entrepreneurs’ success in creation operational ventures. We test our predications on a unique longitudinal data set tracking nascent entrepreneurs venture creation efforts over a time span of 5 years. Using an instrumental variable approach we find evidence supporting our predictions. Our research contributes to a more fine-grained understanding of how culture, in particular cultural norms, influence venture emergence and consequently how venture creation efforts can be supported. Taken together, our research highlights the embeddedness of entrepreneurial behavior and its immediate antecedent beliefs in the local, community context.

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