Entrepreneurial activity across countries is not only diverse but also enduringly so. Research reveals that more than 90% of the variation in current entrepreneurship rates among 155 nations can be traced back to rates from the 1980s.

While culture has long been considered a fundamental determinant of entrepreneurship, empirical studies have struggled to disentangle its impact from other country-specific determinants.

Entrepreneurship, economic, formal institutional, and cultural characteristics are intricately intertwined and reciprocally influence one another, making it challenging to discern the role of culture in entrepreneurship.

Cultural influence

To address this challenge, a recent study, from Copenhagen Business School, examined the entrepreneurial activity among second-generation immigrants of different ancestries. Second-generation immigrants were born, raised, and educated in one country, but their parents emigrated from another country, providing a useful empirical context for examining the role of culture.

Since culture is durable, portable, and intergenerationally transmitted, second-generation immigrants of different ancestries may differ in their propensity for entrepreneurship. Against this backdrop, those whose parents emigrated from countries with a strong entrepreneurial culture are more likely to become entrepreneurs than those whose parents come from countries with a weak entrepreneurial culture.

The study analyzed data from two independent samples of second-generation immigrants of various ancestries in the United States and Europe.

Entrepreneurial culture

The results revealed that the entrepreneurial culture of the country of ancestry is positively associated with the likelihood that second-generation immigrants engage in self-employment, both in the United States and Europe.

The study also found that second-generation immigrants in the United States are more likely to be self-employed when their European counterparts have a higher propensity for entrepreneurship, and vice versa.

The study concludes that national culture is a deeply rooted driver of the observed pronounced and persistent differences in entrepreneurial activity across countries. These differences have implications for national economic performance since entrepreneurship spurs innovation, job creation, and economic dynamism.

Therefore, policymakers must take the cultural context into account while designing entrepreneurship policies and promotion programs. A culturally sensitive approach to entrepreneurship promotion is warranted, even though cultural imprints are not directly changeable by policymakers. The effectiveness of entrepreneurship promotion programs depends on prevailing cultural values and norms.