Kashifa Suddle

How does entrepreneurial activity affect the supply of informal investors

This paper examines the prevalence and the determinants of informal entrepreneurial investment activity (including investors in firms of family and friends, and business angels), using a dataset of more than 175,000 individuals – including some 4000 informal investors – in 28 highly developed countries over the period 2002–04. We distinguish between micro-level and macro-level determinants. The results uncover a positive virtuous circle where the demand for informal investment tends to generate its own supply as a result of micro and macro factors. Our results also suggest that higher levels of entrepreneurial activity at the country level increase the probability that venture capital and informal investment work in tandem with one another as complements rather than substitutes. Overall, we find that entrepreneurial activity whether ongoing or having resulted in exit appears to boost the supply of informal investors. This effect applies to both friends and family (F&F) and business angel investor types.

Entrepreneurial Culture and its Effect on the Rate of Nascent Entrepreneurship

This paper investigates the relationship between entrepreneurial culture and the rate of nascent entrepreneurship. Embedded in trait research, we develop a new composite measure of entrepreneurial culture using data from the World Values Survey. To corroborate the results obtained when regressing this newly developed measure on 2002 levels of nascent entrepreneurship in a sample of 28 countries, we also employ existing indicators of entrepreneurial culture, i.e. McClelland’s N achievement index (The achieving society, Princeton, NJ: D. van Nostrand Company, 1961), Granato et al. Achievement motivation index (American Journal of Political Science, 40(3):604–631, 1996), Lynn’s Competitiveness index (The secret of the miracle economy; different National attitudes to competitiveness and money. Social Affairs Unit, Exeter, 1991), and GLOBE’s (2004) performance orientation measure. In contrast with the existing measures we find a significant positive effect of our new measure of entrepreneurial culture, leading us to (1) discuss the strengths and weaknesses of these existing measures, and (2) interpret the wider implications of our findings for the research into the role of entrepreneurial culture in explaining international differences in entrepreneurship rates.