a case for comparative entrepreneurship: assessing the relevance of culture

A Case for Comparative Entrepreneurship: Assessing the Relevance of CultureAuthor(s): Anisya S. Thomas and Stephen L. MuellerSource: Journal of International Business Studies, Vol. 31, No. 2 (2nd Qtr., 2000), pp. 287-301Published by: Palgrave Macmillan JournalsStable URL: http://www.jstor.org/stable/155638 .

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A Case for Comparative

Entrepreneurship: Assessing th e

Relevance of Culture

Anisya S. Thomas* FLORIDA INTERNATIONAL UNIVERSITY

Stephen L. Mueller** FLORIDA INTERNATIONAL UNIVERSITY

As international entrepreneurship gains momentum as a significant and relevant field of research, scholars need to address method- ological issues that can facilitate the triangulation of research results. In this paper, we examine the relationship between culture and four personality characteristics com-

monly associated with entrepreneurial motivation. By demonstrating systematic variation in entrepreneurial characteristics across cultures, we raise important questions about the boundaries of international entrepreneurship research and the challenges of transcending them.

The study of entrepreneurs and entrepreneurship has recently undergone

a metamorphosis as scholars from diverse fields such as sociology, anthropol- ogy and business strategy apply their disciplinary concepts to the antecedents and consequences of new venture creation. Much of the impetus has derived

from the growing acceptance of the idea that entrepreneurship, both within the context of existing firms as well as those of the start-up variety, spurs the ex- pansion of business, creates new employment potential and fuels economic growth. Inspired by phenomena such as the explosion of growth in Silicon Valley

*Dr. Anisya Thomas is Associate Professor of Management and International Business at Florida International University. Her research interests include international strategic management and entrepreneurship.

**Dr. Stephen Mueller is Assistant Professor of Management and International Business at Florida International University. His research interests include international comparative management issues and entrepreneurship.

A previous version of this paper was awarded the Best Empirical Paper award at the 1998 USASBE meetings and appears in its Proceedings. The authors gratefully acknowledge the contributions of Professor Jan Luytjes who was instrumental in initiating the cross national collaborative team that gathered the data used in the project. We are also grateful to our collaborators in the various countries whose effort and cooperation were essential to the completion of this project. We also thank Ivo Zander and the anonymous reviewers for their insightful and helpful comments.

JOURNAL OF INTERNATIONAL BUSINESS STUDIES, 31, 2 (SECOND QUARTER 2000): 287-301 287



COMPARATIVE ENTERPRISE AND CULTURE

and the attendant innovativeness and wealth creation, entrepreneurship is now a vigorous field of inquiry not only in North America, but in Europe, Asia, and South America as well.

However, the absence of a strong theoretical foundation has contributed to the fragmentation of entrepreneurship research, often resulting in studies that examine the same or similar issues from diverse disciplinary perspectives while ignoring others. It is only recently that scholars have begun to address the need for integrative typologies and paradigms that can provide a coherent platform for diverse research efforts [Hisrich, 1990; Lumpkin and Dess, 1996; Wortman, 1987]. Contemporary theoretical work in entrepreneurship exhibits a concerted awareness of the necessity for frameworks that will facilitate the synthesis of existing research and the generation of new studies that address the gaps [Lumpkin and Dess, 1996; Van de Ven, 1992; West, 1997].

The study of entrepreneurs has recently been internationalized to include research on new venture creation be- yond the boundaries of a single country and the comparison of psychological, societal, and economic factors that motivate or impede the start-up of new firms. In the research domain of international entrepreneurship, the need for synthesis is even more critical. Encompassing research over almost two centuries, the field has included both the study of rates of entrepreneurship as well as the traits of entrepreneurs. The heritage of economics which can be traced to Cantillion [circa 1700] and Schumpeter [1934] has investigated demand conditions which increase the rates of entrepreneurship as well as the contributions made by entrepreneurs to the economic development and vitality of a country. Another impor-

tant stream of research related to international entrepreneurship originated with the work of Weber [1904] and was elaborated by McClelland [1961] who posited that the abundance of individual entrepreneurs is a key supply condition leading to economic success in so-called achieving societies. Today, however, ex- panding interest in international entrepreneurship highlights the need for comparative studies which investigate both the demand and supply conditions that encourage entrepreneurial activity in various countries or regions.

International comparative research is particularly relevant in light of the re- newed interest in entrepreneurship by government policy makers and business leaders worldwide. In the advanced industrialized nations, increased entrepreneurial activity is seen as a means to revitalize stagnating industries, to provide new jobs to compensate for employment problems created by corporate restructuring and downsizing, and to generally enhance economic flexibility and growth [Birch, 1979; Birley, 1986; Swain, 1985]. Furthermore, entrepreneurship has been rediscovered as a cat- alyst for technological progress [Baumol, 1986; Hagen, 1962; Kilby, 1971; Schum- peter, 1934] where entrepreneurial ventures are seen as incubators for product and market innovation [Reynolds, 1987].

In less developed countries, entrepreneurial activity is often encouraged as an avenue to stimulating economic growth [Harper, 1991]. New ventures are seen as replacements for crumbling state-owned enterprises, some of which are legacies of colonial rule. New ventures also tend to be more labor intensive thereby creat- ing job opportunities. In addition, new ventures offer the promise of empower- ing marginalized segments of the popu- lation. Consequently, national incentive

288 JOURNAL OF INTERNATIONAL BUSINESS STUDIES



ANISYA S. THOMAS AND STEPHEN L. MUELLER

and education programs designed to stimulate new venture development have been instituted by the governments of a large number of Asian and Latin American countries as well as the tran- sition economies of Central and Eastern Europe [Audretsch, 1991; Gibb, 1993].

A CASE FOR COMPARATIVE ENTREPRENEURSHIP RESEARCH

In the rush to stimulate entrepreneurial activity, policy makers often rely on the success stories, anecdotes, and pre- scriptions documented in the literature. However, the lack of research in diverse contexts has been a persistent problem in applying entrepreneurship theory in- ternationally. Most social science research generally, and recent entrepreneurship research in particular, have been generated in the U.S. and Western Europe (e.g. Great Britain and Scandina- via). Thus its transferability to contexts where the task and psychic environments may be vastly different remains in question [Adler, 1991; Thomas, Shenkar and Clarke, 1994]. Further, with a few exceptions [Baum, Olian, Erez, Schnell, Smith, Sims, Scully and Smith, 1993; Huisman, 1985; McGrath, MacMillan and Schienberg, 1992; Shane, 1992], international comparative studies of entrepreneurship are rare, hampered by barri- ers such as the difficulty in gaining access to entrepreneurs in other countries, the expense involved, and the lack of reliable published data.

Nonetheless, it should be recognized that the relevance and transferability of U.S. research to non-U.S. contexts is not universal. For example, Kiggundu, Jor- genson and Hafsi [1983] assessed the applicability of various North Ameri- can management theories to developing countries. They found that when there were differences in culture or in eco-

nomic and political systems, conven- tional theories could not explain observed effects and behaviors, particularly if interaction with the environment was required. In closed systems, protected from external forces, transferability of concepts and theories was more successful. Since entrepreneurship, by definition, encompasses the initiation of a new venture, frequently outside tradi- tional boundaries, we would expect contextual factors to have significant impact.

Other authors have found that many organizational and behavioral models include underlying assumptions about capitalism and the Protestant work ethic which are not applicable in many countries [Jaeger and Kanungo, 1990; Ka- nungo, 1990]. Since the literature in entrepreneurship largely stems from the work of Max Weber who wrote about the influence of the Calvanist ethic on the 'entrepreneurial spirit', as well as econ- omists from the Austrian and German traditions, the question of whether entrepreneurs are the same across cultures, is worth asking. In so doing, the portability of entrepreneurship theory across cultural boundaries can be addressed.

ENTREPRENEURSHIP AND CULTURE

The assertion that there is a greater predisposition or propensity toward entrepreneurship in some societies than in others points to the implicit role of culture in the theory of entrepreneurship. Weber [1904] argued that at the society level, differences in entrepreneurial activity can be explained by cultural and religious factors, specifically a society's acceptance of the Protestant work ethic. In his opinion, the Puritan aspects of the Calvinist moral code led to the striving for profit, and through reinvestment of profit, wealth accumulation. Building on Weber's work ethic thesis, McClelland

VOL. 31, No. 2, SECOND QUARTER, 2000 289




[1961] theorized that socialization factors such as parental influences determine the need for achievement, which in turn generates an entrepreneurial propensity within a society. He predicted that societies with cultures that empha- size achievement would exhibit greater levels of entrepreneurship than societies that did not. In more recent work, Shane (1992) linked individualism to the level of inventiveness in a society. Thus the potential for and frequency of entrepreneurship has been shown to be associated to a greater or lesser extent with the occurrence of certain culture specific variables.

Perhaps because of the influence of Weber and McClelland, the ideal profile of the entrepreneur continues to reflect the characteristics of Protestantism and achievement, being primarily developed and tested in U.S. settings. As a conse- quence, "the U.S. culture of individualism and achievement has dominated the world view of entrepreneurship" [Peter- son, 1988:1]. As international interest in the phenomenon increases, the relevance and applicability of a special set of "entrepreneurial" attributes across cultural contexts becomes an important line of inquiry. Accordingly, the core issue driving this effort is the research question: "Are entrepreneurial attributes universal or do they vary systematically across cultures?" If the prevalence of entrepreneurial traits and attributes do indeed vary across cultures, then international comparative research which uses a potentially culture-bound definition of the entrepreneur, may not yield reliable results.

There are persuasive arguments for a universal as well as a contingency ap- proach to defining entrepreneurship. On one hand, the task of entrepreneurship seems to pose similar challenges regard-

less of context. To form new ventures, entrepreneurs require foresight and energy, passion and perseverance, initiative and drive. Some research suggests that entrepreneurs across various cultures are more similar to each other than to their non-entrepreneurial counterparts in their own countries. For example, Baum et al. [1993] found that differences between Israeli entrepreneurs and non-entrepreneurs in their attitudes toward achievement, affiliation, autonomy, and dominance were greater than between Israeli and American entrepreneurs. Similarly, McGrath, et al. [1992] found support for their hypothesis that entrepreneurs, regardless of nationality or cultural background, share a predict- able set of values that are different from those shared by individuals who have followed a non-entrepreneurial trajec- tory. Despite this evidence, it is also rea- sonable to expect that entrepreneurs, like their managerial counterparts, reflect the dominant values of their national culture. Thus, while they might share some universal traits, others might be more culture specific. For example, unlike the idealized American entrepreneur, characterized by rugged individualism, there is growing evidence that Asian entrepreneurs rely on familial ties in developing their business [Redding, 1980]. This fact is illustrated by the ex- panding bamboo network of overseas Chinese entrepreneurs in South East Asia and the numerous businesses owned and operated by joint families among the Gujaratis, Parsees, and Mar- waris in India.

In the following sections, the issue of systematic variance in the occurrence of an entrepreneurial profile across various cultures is addressed through a comparative empirical investigation. First, several key attributes of entrepreneurs are





identified based on a review of the entrepreneurship literature. The relative frequency of occurrences of these attributes are then tested on a comparable sample of international business and economics students in nine countries. Results are discussed and interpreted with a particular focus on the role and relevance of comparative research within the domain of international entrepreneurship.

ENTREPRENEURIAL TRAITS

The term entrepreneur implies a configuration of psychological traits, attributes, attitudes, and values of an individual motivated to initiate a business venture. Despite the argument that using traits to characterize entrepreneurs may be inappropriate [Gartner, 1988], the literature investigating the entrepreneurial profile is fairly consistent on the defining characteristics that distinguish entrepreneurs from non-entrepreneurs. In sum- marizing research on entrepreneurial behavior, Hisrich [1988; 1990] notes that the entrepreneur is characterized as someone who demonstrates initiative and creative thinking, is able to organize social and economic mechanisms to turn resources and situations to practical ac- count, and accepts risk and failure.

In this study, four separate traits are used to define the entrepreneurial profile: innovation, risk-propensity, internal locus of control, and energy level. These were chosen from a number of alternative traits because they capture different facets of the entrepreneur as defined by the literature. These specific traits do not necessarily represent a comprehensive or definitional description of entrepreneurs. They do, however, appear repeat- edly in economics, psychology, sociology, and entrepreneurship research and are representative of the personal char-

acteristics necessary to meet the tasks and challenges of new venture creation.

Foremost among the traits that com- prise the entrepreneurial profile is innovation [Fernald and Solomon 1987; Hor- naday and Aboud 1971; Martin 1984; McClelland 1987; Schumpeter 1966; Timmons 1978]. Schumpeter [1966] argued that value creation was the fundamental role of entrepreneurs in a free market system and hence defined entrepreneurs as individuals who exploit market opportunity through technical and/or organizational innovation [Ties- sen, 1997]. In defining the entrepreneur and distinguishing him or her from a small business owner, Carland, Hoy, Bolton, and Carland observe that "the entrepreneur is characterized princi- pally by innovative behavior" [Carland, Hoy, Boulton, and Carland, 1984:358].

Closely associated with innovation is risk propensity and tolerance for ambiguity, traits that appear in the work of Cantillion (circa, 1700) and to whom the concept of the entrepreneur is credited. Many have argued that the act of venture creation necessarily includes some level of personal financial and psychological risk [Kets de Vries, 1977]. A number of researchers have found empirical evidence in support of the view of entrepreneur as risk-taker. Begley and Boyd [1987], for example, found that business founders scored significantly higher than non-founders on risk-taking propensity and tolerance of ambiguity. However, it has also been observed that in most cases a greater propensity for risk is tempered by sound business judgment precluding risk-taking in the extreme. Thus entrepreneurs are generally characterized as moderate risk takers [Begley and Boyd, 1987; Bird, 1989; Brockhaus, 1982; Sex- ton and Bowman, 1983].





Another psychological trait linked to entrepreneurship is internal locus of control. Internals are individuals who believe they have considerable influence over outcomes in their lives, while exter- nals feel dominated by outside forces such as luck, fate, or powerful others [Rotter, 1966]. Shapero [1975], for example, found that entrepreneurs tend to have a higher internal locus of control orientation than non-entrepreneurs. In other studies as well, internal locus of control has consistently been a distinguishing characteristic of entrepreneurs who were motivated by independence to initiate new ventures [Ahmed, 1985; Brockhaus, 1982; Cromie and Johns, 1983]. Finally, entrepreneurs are typi- cally described as having high energy levels, working the long hours associated with the founding and management of new businesses [Begley and Boyd, 1987; Sexton and Bowman 1983].

To determine whether the entrepreneurial traits profile is applicable to other cultural settings or are bounded by ethnocentric bias, we undertook to measure the degree to which these four entrepreneurial characteristics, innovation, risk propensity, locus of control, and energy level, are prevalent in other cultural settings. With the U.S. model representing the 'ideal' entrepreneur profile, systematic variation in the frequency of entrepreneurial traits was studied as cultural distance from the U.S. increased. In other words, we sought to investigate whether the frequency of the entrepreneurial traits varied systematically with cultural distance from the United States. If indeed such a variation was observed, it would strengthen the argument that the definition of entrepreneurs was culturally bound. If no systematic variance was ev-

ident, the case for universal traits of entrepreneurs would be bolstered.'

METHODOLOGY

Sample The sample used for this study was

drawn from a data set containing approx- imately 1800 responses to a survey of third and fourth year students at univer- sities in nine different countries. The instrument administered to the students was designed to solicit responses indic- ative of their attitudes and perceptions about free-markets, competition, and the contribution of entrepreneurs to economic development. It also asked a se- ries of questions designed to measure personal values, beliefs, and aptitudes associated with an entrepreneurial orientation. Respondents were additionally instructed to provide specific biographi- cal background information so they could be categorized by age, gender, and national origin.

The survey instrument was distributed during 1996 to students studying business, economics, or engineering and administered in a classroom setting by local professors who had agreed to par- ticipate in the research project and administer the survey in exchange for access to the survey data. In the United States, Canada, Ireland, and at schools in European countries where the students' command of English was highly profi- cient, the survey was administered in English. In the case of non-English speaking countries or regions where translations were required, the instrument was translated and back-translated by bilingual professors at the local insti- tutions where the instrument was administered.

University students were selected as subjects for this study for several rea-





sons. First, the identification of a popu- lation of practicing entrepreneurs across a wide sample of countries is difficult if not impossible. Not only is the definitional boundary between entrepreneurs and small business owners blurred, many countries do not maintain records of new business starts. Furthermore, many entrepreneurs do not ever register their businesses, especially in the developing economies where they might be subjected to impediments that govern- mental bureaucracies often impose. Sec- ond, we would argue that today's university students represent a significant share of the pool of potential entrepreneurs in both the developed and developing countries. As the demands of technology and global competition increases, the need for university-trained entrepreneurs will become more evident and success in business will increasingly be dependent upon the founder's education and training. Third, sampling only students in business, economics, and engineering enhances cross-national compa- rability by effectively controlling for important variables such as literacy, work experience, age, and education. Finally, as a matter of practicality, student subjects are generally convenient, accessi- ble, and through the support of admin- istering professors, it was possible to maintain some degree of control over the testing environment.

Measures Of the 62 items on the survey instru-

ment, 34 were used to construct four scales which measure specific motivational factors believed to discriminate between an entrepreneurial and a non- entrepreneurial orientation. These four scales are: (1) innovativeness, (2) locus of control, (3) risk-taking, and (4) energy level. Items and scales for innovative-

ness, risk-taking, and energy level were adapted from the Jackson Personality In- ventory [Jackson, 1994]. Items used for the locus of control scale were adapted from Rotter's I-E scale [Rotter, 1966]. Each of the four scales was subjected to reliability testing using data collected in this nine-country study. Reliability test results indicate that Cronbach's alpha scores were in an acceptable range for each of the four scales (generally in the range of .65 to .85) with minimal variance across country samples.

Innovativeness. The Jackson Personal- ity Inventory Manual (JPI) defines innovativeness as a tendency to be creative in thought and action. Adjectives on the instrument used to describe entrepreneurs which highly correlate with innovativeness include imaginative, inven- tive, enterprising, original, resourceful, and farsighted [Jackson, 1994]. A high score on the JPI innovativeness scale indicates a preference for novel solutions to problems and an appreciation for original ideas. For this study, 8 items were adapted from the JPI innovativeness scale. The eight items chosen were those which appeared to contain the least amount of potential Anglo-American context bias.

Locus of control. Prior research has demonstrated that compared to non- entrepreneurs, entrepreneurs tend to exhibit higher internal locus of control [Be- gley and Boyd, 1987; Brockhaus, 1982]. In the current study, a modified Rotter I-E Scale, consisting of 10 items, was used to measure internal locus of control [Rotter, 1966].

Risk-taking. Research has also shown that entrepreneurs tend to have a higher risk-taking propensity than do non-entrepreneurs, but this risk-taking is tempered by judgement. The Jackson Per- sonality Inventory risk-taking scale con-




COMPARATIVE ENTERPRiSE AND CULTURE

siders four facets of risk-taking: physi- cal, monetary, social, and ethical was adapted for this study. Only the 8 items emphasizing the monetary risk-taking facet were adopted. Individuals who score high on this scale are prone to ex- posing themselves to situations having uncertain outcomes.

Energy Level. Many entrepreneurs are considered workaholics with a Type A personality, strong work ethic, perseverance, and commitment [Begley and Boyd, 1987; Sexton and Bowman, 1983]. The Jackson Personality Inventory was used to measure energy level as well. According to the JPI manual, 'energy level' is an individual's characteristic overall level of functioning in carrying out day-to-day activities. Someone scor- ing high on this scale is expected to be energetic in a variety of self-selected tasks and to demonstrate appreciable enthusiasm and endurance. Other attributes which describe entrepreneurs and correlate highly with the energy level construct include enterprising, initiative, energetic, persistent, and self- confident [Jackson, 1994].

Cultural Distance. Culture measures for this study were derived from the work of Hofstede [1980]. Of the 15 countries originally sampled in the survey, only nine were in the Hofstede study. Therefore the analysis was limited to the United States, Singapore, Croatia, Slovenia, Canada, Ireland, Belgium, Ger- many, and China. Each of these countries was scored using Hofstede's four cultural indices denoted as pdi (power distance), uai (uncertainty avoidance), idv (individualism), and mas (masculin- ity).

Following Kogut & Singh [1988], the concept of cultural distance was utilized to determine whether systematic variation exists across cultures in each of the

four entrepreneurial traits. Using Hof- stede's indices, a composite index was formed based on the deviation along each of the four cultural dimensions of each country from the United States index. Giving equal weight to each of the four dimensions, cultural distance for each country (j) was computed as fol- lows:

Cultural Distance (j)

I/(pdij - pdius)2 + (uai1- uaiu-)2

- (idvj - idVus)2 + (masj - masus)2

Country level data including cultural distance from the United States, number of respondents, breakdown by gender, and the frequency rate for each of the four entrepreneurial traits are presented in summary form as Table 1.

RESULTS

Multivariate logistic regression analysis was used to test the relationship between cultural distance from the United States and prevalence of each of the four profile characteristics. Logistic regression is similar to least-squares regression but is the appropriate method to use when the dependent variable is binary, i.e. 1 or 0, yes or no, high or low. Since in this case the four dependent variables represent probabilities or propensities to be innovative, a moderate risk-taker, etc., it was necessary to convert a respondent's score to a category variable in or- der to obtain frequency measures at the country level. Respondent scores for the four traits ranged from a maximum of 40 (60 for locus of control) to a minimum of 8 (10 for locus of control). A frequency distribution of scores for each trait was used to determine a suitable breakpoint value which separated the upper 50 percentile from the lower 50 percentile. In





TABLE 1 CouTmRY LEVEL DATA

Sample % Cultural Risk-Taking Energy Size Males Distance ILOC Innovative Propensity Level

United States 476 55 .61 .47 .33 .62 Canada 253 49 15 .57 .38 .24 .49 Ireland 90 77 27 .33 .37 .34 .50 Germany 84 73 31 .23 .37 .38 .42 Belgium 271 62 57 .39 .38 .25 .57 China 172 53 78 .22 .20 .30 .29 Singapore 99 12 88 .15 .24 .28 .25 Croatia 123 31 94 .20 .27 .15 .33 Slovenia 278 54 94 .29 .44 .22 .39

the case of the risk-taking scale, two breakpoints were need to determine a "moderate" range of risk-taking with the second quartile chosen as representing an entrepreneurial risk-taking level. In this manner, each respondent's trait score was converted to a high (1) or low (0) value.

Results of the logistic regression analysis are summarized as Table 2. Cultural distance was regressed independently

on each of the four traits: innovativeness, internal locus of control, risk-taking, and energy level. A dummy variable representing gender (Male=1 and Female=O) was also included as a control variable in all four regression models.

The results of the regression analysis, as depicted in Table 2, indicate no sta- tistically significant difference in the likelihood of an innovative orientation

TABLE 2

EFFECTS OF CULTURAL DISTANCE (FROM U.S.) AND GENDER ON THE

PREVALENCE OF ENTREPRENEURIAL TRAITS

Internal Locus Risk-Taking Innovativeness of Control Propensity Energy Level

Intercept -0.6174*** 0.2510** -1.0839*** 0.2819** (0.0958) (0.0940) (0.1052) (0.0932)

Male 0.5668*** 0.0694 0.5398*** 0.1553 (0.0986) (0.0998) (0.1085) (0.0975)

Cultuiral Distance -0.0023 -0.0137*** -0.0037** -0.0107*** (0.0012) (0.0013) (0.0014) (0.0012)

-2 Log L. 2364.25 2308.46 2081.32 2389.98 Num. of Obs. 1790 1790 1790 1790

Standard errors in parentheses. ***Denotes p < .05. * *Denotes p < .01.

*Denotes p < .001.





as cultural distance from the United States increases. This finding suggests that innovativeness, often considered to be one of the most crucial characteristics of entrepreneurs, does not vary systematically with cultural distance from the United States, perhaps attesting to its universality. The implication is that regardless of culture, entrepreneurs are individuals who buck the institutional in- frastructure to create new ventures and need to be innovative, discover new needs in the market, and exploit niches in the industry. These results are consistent with extant theory and prior research. In every definition of entrepreneurship, innovation is inevitably a core component. In the same vein, Kolvereid and Obloj [1994] in a comparison of Pol- ish, British and Norwegian entrepreneurs, found innovation to be a common motivation for the act of new venture formation.

The results also indicate that the likelihood of an internal locus of control orientation decreases as the cultural distance from the U.S. increases. In other words, as cultural distance from the United States increases, the degree to which a person feels in control of his or her destiny diminishes. This finding implies that locus of control, long thought to be a distinguishing trait of entrepreneurs, may in fact be a culture-specific quality related to the individualism dimension. As the original Hofstede [1980] data show, the United States ranked highest on this dimension followed by Great Britain and Australia, with Vene- zuela and Columbia ranking the lowest. As cultures become less individualistic and more collectivist, people are more likely to identify with the group to which they belong, diminishing the degree of control that they feel over their environments, but not necessarily di-

minishing their entrepreneurial propensity. In high individualism countries, having autonomy is more important, individual decisions are considered supe- rior, and individual initiative is socially encouraged. In collectivistic countries, security is rated as more important, group decisions are considered better than individual ones, and individual initiative is discouraged. In noting the relationship between individualism and organizational science, Hofstede observed "The individualism-collectivism dimension is also visible in normative organization theories coming from different countries. The United States is the major exporter of modern organization theories, but its position of extreme individualism in comparison to other countries makes the relevance of some of its theories in other cultural environments doubtful" [Hofstede, 1980: 219].

The third dimension, risk-taking propensity, also varied systematically with cultural distance from the U. S. As cultural distance from the U.S. increases, the likelihood of a moderate risk-taking propensity decreases. This finding pro- vides strong evidence to suggest that risk-tasking propensity, a fundamental component of an American entrepreneurial profile in fact varies systematically across cultures and may be related to the uncertainty avoidance dimension of culture. Hofstede's initial study found that low uncertainty avoidance cultures are less conservative, more achievement oriented, and manifest more willingness to take risk than high uncertainty avoid- ing cultures. They also tend to have advanced modernization, older democra- cies, and less legislation - all factors associated with entrepreneurship. Thus the question of whether entrepreneurial behavior is associated with risk-taking, with deeper cultural values, or with the





infrastructures associated with these remains unresolved.

Similar to locus of control and risk- propensity, the likelihood of high energy level decreases with cultural distance from the United States. This finding, somewhat harder to explain, may be linked to the individualism dimension of culture and actually be an artifact of the manner in which the questions are posed. In an early study, Converse [1972] compared the time use of citizens in 12 countries and suggested that overall time use could be categorized broadly along North-South dimensions which reflect the level of modernization in a society. He found that in the more developed North countries, which in Hofstede's study are the more individualistic, people spend more time watching TV, shop- ping, in personal care, in religious activities, and reading papers. In contrast, in the South countries, or the more collectivist ones, time is spent resting, cook- ing, tending animals, gardening, being outdoors, sleeping, and eating. However, more research is needed to determine whether our finding on energy level is related to some underlying work ethic (e.g. Protestant work ethic) or is simply an artifact of the type of questions asked.

Gender was used as a control variable in all four regression models based on the findings of prior research which suggest that, independent of culture, there are differences in psychological profile between male and female entrepreneurs [e.g. Fernald & Solomon 1987]. However, no significant differences were found between males and females on either locus of control orientation or energy level. On the other hand, there were significant difference between males and females with respect to innovativeness and risk- taking indicating that males exhibit

greater levels of innovativeness and risk- taking than their female counterparts.

DISCUSSION

In identifying the sixty two most prominent 'writers on organizations', Pugh and Hickson note that their list contained forty three Americans, twelve Britons, two Canadians, two Frenchmen, two Germans and one Dutchman. In commenting on this the authors observe, "The Anglo predominance is no sur- prise, since organization theory acceler- ated first in these societies, even though its origin is attributed to Weber, one of two Germans and Fayol, one of two Frenchman. Nor is it surprising that all are from the advanced industrialized societies of Western Europe where research could be financed and freedom of ideas encouraged [Pugh and Hickson 1997:5].

The core question guiding this study is whether the prevalence of traits compris- ing the entrepreneurial profile vary systematically across different cultures. In this study we found that three traits associated with entrepreneurial potential, namely internal locus of control, moderate risk-taking propensity, and high energy level decrease in frequency as cultural distance from the United States increases. The frequency of an innovative orientation, however, does not appear to vary with cultural distance.

Understanding cultural influences on the development of entrepreneurial potential is crucial to the internationaliza- tion of entrepreneurship theory and the development and implementation of policy initiatives to encourage entrepreneurship in various areas of the globe. By observing the occurrence of specific entrepreneurial traits as cultural distance from the United States increases, we





sought to gain some insight to the relevance and applicability of the existing entrepreneurial archetype in different cultural contexts. Although the use of students rather than entrepreneurs does pose a limitation, it also facilitates the comparison of the frequency of appear- ance of each of the four profile elements. The underlying logic is similar to the social legitimation or supportive environment perspective put forth by Etzioni [1987]. The prevailing values and beliefs among the relevant pool of potential entrepreneurs may make an individual more or less inclined to go into business for herself or himself [Davidsson and Wiklund, 1997].

As anticipated, the results of this study raise more questions about similarities and differences in entrepreneurship around the world than they answer. Most significant among these is the fundamental issue of whether entrepreneurship and the defining characteristics of the entrepreneur are perceived through an ethnocentric lens. In other words, does our conception of the entrepreneur stem from our exposure to and experience with the American entrepreneur? If so, is it possible that we do not have the language and the tools to identify and track entrepreneurs in other cultural contexts? On the other hand, is it possible that McClelland and Weber were ac- curate in suggesting that entrepreneurship is the domain of achieving societies that adhere to the Protestant ethic? Per- haps an historically robust U.S. economy can be explained by adherence to strong entrepreneurial values which are an in- tegral part of its national culture. The celebration of entrepreneurship and the concept that America is a country where anything is possible continues to be an enduring attraction to immigrants from all over the world. As Hull, Bosely, and

Udell [19] observed, ".. . the American public has long regarded entrepreneurship as a time tested way to realize the American dream." The third alternative is that the answer lies somewhere in between the universal and culturally con- tingent extremes.

This study alone does not provide a definitive answer to the question: Is the American entrepreneurial archetype universal? Much more research is required. Case studies that permit the in- duction of the entrepreneurial profile among various societies are necessary for the development of typologies of international entrepreneurs that can par- simoniously capture similarities and differences. These can then be tested em- pirically using large samples of entrepreneurs. Culture, representing the shared values and beliefs of a society, is an important contextual factor affecting the number of potential entrepreneurs in a given community, region, or country. Identifying the nature of the relationship between culture and entrepreneurship can provide governments with information necessary for targeted programs in- tended to motivate new venture creation and thereby increase employment and add to the nation's economic vitality and flexibility. But motivational differences across cultures can be striking. As McGrath, MacMillan, Yang, and Tsai observe: "People who are from 'live to work' cultures respond to the excitement and self-fulfilling aspects of entrepreneurship. People from 'work to live' cultures respond better to arguments that stress upward mobility [1992:4541. Clearly, rigorous comparative research in the domain of international entrepreneurship can help develop better and more generalizable theories of venture creation to guide public policy.

298 JOURNAL OF INTERNATIONAL BUSiNESS STUDIES




NOTES

1. In this paper cultural distance is used to measure differences in national culture across the nine countries. How- ever, it should be noted that the cultural dimensions used are also correlated with other institutional, political and economic factors (e.g. see Hofstede, 1980).

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a case for comparative entrepreneurship: assessing the relevance of culture

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