Individual determinants of entrepreneurship in Visegrád countries: Reflection on GEM data from the Czech Republic, Hungary, Poland, and Slovakia

Abstract

Objective: The article explores the individual determinants driving solo self-employment and employer entrepreneurship in four post-communist economies located in Central Europe (the Czech Republic, Hungary, Poland, and Slovakia).

Research Design & Methods: The article exploits data from the 2013 Adult Population survey, a part of the Global Entrepreneurship Monitor (GEM). Using multivariate logistic regression models, we explore the differences between wage-employed, solo self-employed, and employer entrepreneurs (self-employed with employees), concerning traditional determinants of entrepreneurship, such as gender, age, education, entrepreneurial confidence, and the number of people living in a household.

Findings: The obtained findings show that – regardless of the type of self-employment – there is a strong and positive impact of entrepreneurial confidence on the likelihood of being an established entrepreneur. The impact of remaining variables differed across the type of entrepreneurship.

Implications & Recommendations: This research highlights that self-employed individuals with and without employees should be treated in research and policymaking separately.

Contribution & Value Added: The presented research contributes to the growing body of literature aiming to understand differences between solo self-employed individuals and employer entrepreneurs.

Keywords

Individual Determinants of Entrepreneurship; Self-employment; Job Creators; Solo Self-employed Individuals; Global Entrepreneur-ship Monitor; Czech Republic; Hungary; Slovakia; Poland

References

1. Barcik, A., Dziwiński, P., & Jakubiec, M. (2017). The Potential of Academic Entrepreneurship in Universities of Visegrad Group Countries. Zeszyty Naukowe Politechniki Częstochowskiej Za-rzadzanie, 2017(27), 18-35.
2. Blanchflower, D.G. (2000). Self-employment in OECD countries. Labour Economics, 7(5), 471-505. https://doi.org/10.1016/S0927-5371(00)00011-7
3. Block, J., & Sandner, P. (2009). Necessity and opportunity entrepreneurs and their duration in self-employment: evidence from German micro data. Journal of Industry, Competition and Trade, 9(2), 117-137. https://doi.org/10.1007/s10842-007-0029-3
4. Bögenhold, D. (2019). From Hybrid Entrepreneurs to Entrepreneurial Billionaires: Observations on the Socioeconomic Heterogeneity of Self-employment. American Behavioral Scientist, 63(2), 129-146. https://doi.org/10.1177/0002764218794231
5. Bögenhold, D., Klinglmair, A., Parastuty, Z., & Kandutsch, F. (2019). Micro-entrepreneurship and changing contours of work: towards precarious work relations? Empirical findings from Aus-tria. In W. Conen, J. Schippers, (Eds.) Self-Employment as Precarious Work. Cheltenham: Ed-ward Elgar Publishing.
6. Boudreaux, C.J., Nikolaev, B.N., & Klein, P. (2019). Socio-cognitive traits and entrepreneurship: The moderating role of economic institutions. Journal of Business Venturing, 34(1), 178-196. https://doi.org/10.1016/j.jbusvent.2018.08.003
7. Burk, A., & Cowling, M. (2015). The use and value of freelancers: The perspective of managers. International Review of Entrepreneurship, 13(1), 7-20.
8. Burke, A., Lyalkov, S., Millán, A., Millán, J.M., & van Stel, A. (2019). How do country R&D change the allocation of self-employment across different types?. Small Business Economics, 1-27. https://doi.org/10.1007/s11187-019-00196-z
9. Caliendo, M., Fossen, F., & Kritikos, A.S. (2014). Personality characteristics and the decisions to become and stay self-employed. Small Business Economics, 42(4), 787-814. https://doi.org/10.1007/s11187-013-9514-8
10. Cieślik, J., & van Stel, A. (2014). Comparative analysis of recent trends in private sector develop-ment in CEE transition economies. Entrepreneurship Research Journal, 4(2), 205-235. https://doi.org/10.1515/erj-2013-0054
11. Cieślik, J., & Dvouletý, O. (2019). Segmentation of the population of the solo self-employed. Inter-national Review of Entrepreneurship, 17(3), 281-304.
12. Coad, A., Nielsen, K., & Timmermans, B. (2017). My first employee: an empirical investigation. Small Business Economics, 48(1), 25-45. https://doi.org/10.1007/s11187-016-9748-3
13. Cowling, M. (2000). Are entrepreneurs different across countries?. Applied Economics Letters, 7(12), 785-789. https://doi.org/10.1080/135048500444804
14. Cowling, M., Taylor, M., & Mitchell, P. (2004). Job creators. The Manchester School, 72(5), 601-617. https://doi.org/10.1111/j.1467-9957.2004.00411.x
15. Douglas, E.J., & Shepherd, D.A. (2002). Self-employment as a career choice: Attitudes, entrepre-neurial intentions, and utility maximization. Entrepreneurship theory and practice, 26(3), 81-90. https://doi.org/10.1177/104225870202600305
16. Dana, L.P., & Dana, T. (2003). Management and enterprise development in post-communist econ-omies. International Journal of Management and Enterprise Development, 1(1), 45-54. https://doi.org/10.1504/IJMED.2003.003512
17. Dana, L.P., & Ramadani, V. (2015). (Eds.) Family businesses in transition economies. Cham: Springer International Publishing.
18. Davidsson, P. (2015). Data replication and extension: A commentary. Journal of Business Venturing Insights, 3, 12-15. https://doi.org/10.1016/j.jbvi.2015.02.001
19. Delmar, F. (2015). When the dust has settled: A final note on replication. Journal of Business Venturing Insights, 4, 20-21. https://doi.org/10.1016/j.jbvi.2015.07.001
20. Djankov, S., Qian, Y., Roland, G., & Zhuravskaya, E. (2006). Who are China’s entrepreneurs?. Amer-ican Economic Review, 96(2), 348-352. https://doi.org/10.1257/000282806777212387
21. Dimov, D. (2010). Nascent entrepreneurs and venture emergence: Opportunity confidence, human capital, and early planning. Journal of Management Studies, 47(6), 1123-1153. https://doi.org/10.1111/j.1467-6486.2009.00874.xC
22. Dvouletý, O. (2017a). What is the Relationship between Entrepreneurship and
23. Unemployment in Visegrad Countries?. Central European Business Review, 6(2), 42-53. https://doi.org/10.18267/j.cebr.179
24. Dvouletý, O. (2017b). Can policy makers count with positive impact of entrepreneurship on eco-nomic development of the Czech regions?. Journal of Entrepreneurship in Emerging Econo-mies, 9(3), 286-299. https://doi.org/10.1108/JEEE-11-2016-0052
25. Dvouletý, O. (2018). Determinants of Self-employment With and Without Employees: Empirical Findings from Europe. International Review of Entrepreneurship, 16(3), 405-426.
26. Dvouletý, O. (2019). Development of Entrepreneurial Activity in the Czech Republic over the Years 2005-2017. Journal of Open Innovation: Technology, Market, and Complexity, 5(3), 38. https://doi.org/10.3390/joitmc5030038
27. Dvouletý, O., Procházka, D.A., & Starnawska, M. (2019). Who Earns more: Job Creators, Solo-Entrepreneurs or Employees? Empirical evidence from Visegrad Countries. International Jour-nal of Entrepreneurship and Small Business. https://doi.org/10.1504/IJESB.2019.10020600
28. Ekelund, J., Johansson, E., Järvelin, M.R., & Lichtermann, D. (2005). Self-employment and risk aversion — evidence from psychological test data. Labour Economics, 12(5), 649-659.
29. Fairlie, R.W., & Miranda, J. (2017). Taking the leap: The determinants of entrepreneurs hiring their first employee. Journal of Economics & Management Strategy, 26(1), 3-34. https://doi.org/10.1111/jems.12176
30. Fischer, S., Sahay, R., & Vegh, C.A. (1996). Stabilization and growth in transition economies: the early experience. Journal of Economic Perspectives, 10(2), 45-66. https://doi.org/10.1257/jep.10.2.45
31. Gerber, T.P. (2001). Paths to success: individual and regional determinants of self-employment entry in post-communist Russia. International Journal of Sociology, 31(2), 3-37. https://doi.org/10.1080/15579336.2001.11770227
32. Global Entrepreneurship Monitor. (2019). GEM Entrepreneurial Behaviour and Attitudes. Retrieved from https://www.gemconsortium.org/data/key-aps on September 23, 2019.
33. Global Entrepreneurship Monitor (2013). GEM 2013 Global Individual Level Data. Retrieved from https://www.gemconsortium.org/data/sets?id=nes on September 23, 2019.
34. Głodowska, A., Maciejewski, M., & Wach, K. (2019). How Entrepreneurial Orientation Stimulates Different Types of Knowledge in the Internationalisation Process of Firms from Poland?. En-trepreneurial Business and Economics Review, 7(1), 61-73. https://doi.org/10.15678/EBER.2019.070104
35. Grace, K. (2018). The impact of personal income tax rates on the employment decisions of small businesses. Journal of Entrepreneurship and Public Policy, 7(1), 74-104.
36. Hoetker, G. (2007). The use of logit and probit models in strategic management research: Critical issues. Strategic Management Journal, 28(4), 331-343. https://doi.org/10.1002/smj.582Ci
37. Holienka, M. (2014). Youth entrepreneurship in Slovakia: a GEM based perspective. Comenius Management Review, 8(2), 41-50.
38. Holienka, M., Pilková, A., & Jancovicová, Z. (2016). Youth entrepreneurship in Visegrad Countries. Entrepreneurial Business and Economics Review, 4(4), 105-121. https://doi.org/10.15678/EBER.2016.040407
39. Holienka, M., Gal, P., & Kovačičová, Z. (2017). Drivers of student entrepreneurship in Visegrad four countries: Guesss evidence. Central European Business Review, 6(2), 54-64. https://doi.org/10.18267/j.cebr.180
40. Hytti, U., Kautonen, T., & Akola, E. (2013). Determinants of job satisfaction for salaried and self-employed professionals in Finland. The International Journal of Human Resource Manage-ment, 24(10), 2034-2053. https://doi.org/10.1080/09585192.2012.723023
41. Kirby, D.A., & Watson, A. (2017). (Eds.) Small Firms and Economic Development in Developed and Transition Economies: A Reader. New York: Routledge.
42. Koellinger, P., Minniti, M., & Schade, C. (2007). ‘I think I can, I think I can’: Overconfidence and entrepreneurial behavior. Journal of Economic Psychology, 28(4), 502-527. https://doi.org/10.1016/j.joep.2006.11.002
43. Kolvereid, L. (1996). Organizational employment versus self-employment: Reasons for career choice intentions. Entrepreneurship Theory and Practice, 20(3), 23-31. https://doi.org/10.1177/104225879602000302
44. Krasniqi, B.A., & Desai, S. (2016). Institutional drivers of high-growth firms: country-level evidence from 26 transition economies. Small Business Economics, 47(4), 1075-1094.
45. Jakubczak, J., & Rakowska, A. (2014). Cultural values and entrepreneurship: Pilot study. In Human capital without borders: Knowledge and learning for quality of life: Proceedings of the Man-agement, Knowledge and Learning International Conference (pp. 529-536). Retrieved from http://www.toknowpress.net/ISBN/978-961-6914-09-3/papers/ML14-586.pdf on September 23, 2019.
46. Jones, M.K., & Latreille, P.L. (2011). Disability and self-employment: Evidence for the UK. Applied Economics, 43(2011), 4161-4178. https://doi.org/10.1080/00036846.2010.489816
47. Laguía, A., García-Ael, C., Wach, D., & Moriano, J.A. (2019). ‘Think entrepreneur-think male’: a task and relationship scale to measure gender stereotypes in entrepreneurship. International En-trepreneurship and Management Journal, 15(3), 749-772. https://doi.org/10.1007/s11365-018-0553-0
48. Lindquist, M., Sol, J., & van Praag, M. (2015). why do entrepreneurial parents have entrepreneurial children?. Journal of Labor Economics, 33(2), 269-296. https://doi.org/10.1086/678493.
49. Lukeš, M., Jakl, M., & Zouhar, J. (2014). Global Entrepreneurship Monitor 2013 for the Czech Re-public (in Czech) / Podnikatelská aktivita v České republice. Retrieved from https://www.mpo.cz/assets/dokumenty/50478/57277/612398/priloha001.pdf on September 23, 2019.
50. Lukeš, M., Zouhar, J., Jakl, M., & Očko, P. (2013). Factors influencing entrepreneurial entry: Early-stage entrepreneurs in the Czech Republic. Politická ekonomie, 61(2), 229-247.
51. Lukeš, M., & Zouhar, J. (2013). No experience? No problem–it’s all about yourself: Factors influ-encing nascent entrepreneurship outcomes. Ekonomický časopis, 61(9), 934-950.
52. Lukeš, M., & Zouhar, J. (2016). The causes of early-stage entrepreneurial discontinuance. Prague Economic Papers, 2016(1), 19-36. https://doi.org/10.18267/j.pep.534
53. Mahto, R.V., & McDowell, W.C. (2018). Entrepreneurial motivation: a non-entrepreneur’s journey to become an entrepreneur. International Entrepreneurship and Management Journal, 14(3), 513-526. https://doi.org/10.1007/s11365-018-0513-8
54. Márkus, G., & Szerb, L. (2013). Global Entrepreneurship Monitor 2013 for Hungary (in Hungarian) / Globális Vállalkozói Monitor Magyarország jelentések. Retrieved from https://www.gemconsortium.org/report on September 23, 2019.
55. Millán, J.M., Congregado, E., & Román, C. (2012). Determinants of self-employment survival in Europe. Small Business Economics, 38(2), 231-258. https://doi.org/10.1007/s11187-010-9260-0
56. Millán, A., Millán, J.M., Román, C., & Van Stel, A. (2014). Determinants of the own-account work-er’s decision to hire employees: A review. International Review of Entrepreneurship, 13(2), 129-142.
57. Money, R.B., & Colton, D. (2000). The response of the ‘new consumer’to promotion in the transi-tion economies of the former Soviet bloc. Journal of World Business, 35(2), 189-205.
58. Muñoz-Bullón, F., Sánchez-Bueno, M.J., & Vos-Saz, A. (2015). Nascent entrepreneurs’ personality attributes and the international dimension of new ventures. International Entrepreneurship and Management Journal, 11(3), 473-492. https://doi.org/10.1007/s11365-013-0284-1
59. Ovaska, T., & Sobel, R.S. (2005). Entrepreneurship in post-socialist economies. Journal of Private Enterprise, 21(1), 8-28.
60. Parker, S.C. (2004). The economics of self-employment and entrepreneurship. Cambridge Universi-ty Press.
61. Petrescu, M. (2016). Self-employed individuals with and without employees: Individual, social and economic level differences. International Review of Entrepreneurship, 14(3), 289-312.
62. Pilková, A., Holienka, M., Kovačičová, Z., & Rehák, J. (2014). Global Entrepreneurship Monitor 2013 for Slovakia (in Slovak) / Podnikanie na Slovensku: aktivita, inkluzivita, prostredie. Retrieved from https://www.gemconsortium.org/report on September 23, 2019.
63. Pilkova, A., & Kovacicova, Z. (2015). Specifics of the entrepreneurial activities of slovaks: Evidences based on GEM research. Procedia Economics and Finance, 34, 368-375. https://doi.org/10.1016/S2212-5671(15)01642-1
64. Pilková, A., Jančovičová, Z., & Kovačičová, Z. (2016). Inclusive entrepreneurship in Visegrad4 coun-tries. Procedia-Social and Behavioral Sciences, 220, 312-320. https://doi.org/10.1016/j.sbspro.2016.05.504
65. Polok, D., Michalski, P., Szewczyk, D., Keil, D., Wieczore, S., Kaciakova, P., Incze, Z., Rycerz, J., Nisz-tuk, T., Dvouletý, O., & Krzemiński, P. (2016). Future of the Visegrad Group. Retrieved from http://serwer1585910.home.pl/upload/source/Think_Paga/raportV4/Future%20of%20the%20Visegrad%20Group_2016.pdf on September 23, 2019.
66. Morawska, E. (1999). The malleable homo sovieticus: transnational entrepreneurs in post-communist East Central Europe. Communist and Post-Communist Studies, 32(4), 359-378. https://doi.org/10.1016/S0967-067X(99)00022-7
67. Nowiński, W., Haddoud, M.Y., Lančarič, D., Egerová, D., & Czeglédi, C. (2019). The impact of entre-preneurship education, entrepreneurial self-efficacy and gender on entrepreneurial intentions of university students in the Visegrad countries. Studies in Higher Education, 44(2), 361-379. https://doi.org/10.1080/03075079.2017.1365359
68. Rees, H., & Shah, A. (1986). An empirical analysis of self‐employment in the UK. Journal of Ap-plied Econometrics, 1(1), 95-108. https://doi.org/10.1002/jae.3950010107
69. Sachs, J., & Woo, W.T. (1994). Structural factors in the economic reforms of China, Eastern Eu-rope, and the former Soviet Union. Economic Policy, 9(18), 101-145. https://doi.org/10.2307/1344459
70. Sauka, A. & Chepurenko, A. (2017). (Eds.) Entrepreneurship in Transition Economies: Diversity, Trends, and Perspectives. Cham, Switzerland: Springer. https://doi.org/10.1007/978-3-319-57342-7
71. Shama, A. (1993). Management under fire: The transformation of managers in the Soviet Union and Eastern Europe. Academy of Management Perspectives, 7(1), 22-35.
72. Shiller, R.J., Boycko, M., Korobov, V., Winter, S.G., & Schelling, T. (1992). Hunting for Homo Soviet-icus: situational versus attitudinal factors in economic behavior. Brookings Papers on Econom-ic Activity, 1992(1), 127-194.
73. Shoubaki, A.E., & Stephan, M. (2018). The Life Partner and the Life Satisfaction of the Entrepre-neur. Central European Business Review, 2018(3), 26-41. https://doi.org/10.18267/j.cebr.201
74. Simoes, N., Crespo, N., & Moreira, S.B. (2016). Individual determinants of self‐employment
75. entry: What do we really know?. Journal of Economic Surveys, 30(4), 783-806. https://doi.org/10.1111/joes.12111
76. Šebestová, J., & Sroka, W. (2020). Sustainable development goals and SMEs decisions: Czech Republic vs. Poland. Journal of Eastern European and Central Asian Research (JEECAR), 7(1), 39-50. https://doi.org/10.15549/jeecar.v7i1.418
77. Švejnar, J. (2002). Transition economies: Performance and challenges. Journal of Economic Per-spectives, 16(1), 3-28. https://doi.org/10.1257/0895330027058
78. Szerb, L., & Imreh, S. (2007). Entrepreneurship Education and Entrepreneurial Attitudes of Hungar-ian Students: An International Comparison. In Proceedings of 5th International Conference on Management, Enterprise and Benchmarking, MEB (pp. 71-88). Retrieved from https://kgk.uni-obuda.hu/sites/default/files/6_Szerb.pdf on September 23, 2019.
79. Tarnawa, A., Zadura-Lichota, P., Zbierowski, P., & Nieć, M. (2014). Global Entrepreneurship Moni-tor 2013 for Poland. Retrieved from https://www.gemconsortium.org/report on September 23, 2019.
80. van der Zwan, P., Thurik, R., Verheul, I., & Hessels, J. (2016). Factors influencing the entrepreneur-ial engagement of opportunity and necessity entrepreneurs. Eurasian Business Review, 6(3), 273-295. https://doi.org/10.1007/s40821-016-0065-1
81. Van Praag, C.M., & Ophem, H.V. (1995). Determinants of willingness and opportunity to start as an entrepreneur. Kyklos, 48(4), 513-540. https://doi.org/10.1111/j.1467-6435.1995.tb01282.x
82. van Stel, A., & van der Zwan, P. (2019). Analyzing the changing education distributions of solo self-employed workers and employer entrepreneurs in Europe. Small Business Economics, 1-17. https://doi.org/10.1007/s11187-019-00243-9
83. Visegrád Group (2019). About the Visegrád Group. Retrieved from http://www.visegradgroup.eu/about/about-the-visegrad-group on September 23, 2019.
84. Wach, K., & Wojciechowski, L. (2016). Entrepreneurial Intentions of Students in Poland in the view of Ajzen’-s Theory of Planned Behaviour. Entrepreneurial Business and Economics Review, 4(1), 83-94. https://doi.org/10.15678/EBER.2016.040106
85. Wallace, C., & Latcheva, R. (2006). Economic transformation outside the law: corruption, trust in public institutions and the informal economy in transition countries of Central and Eastern Eu-rope. Europe-Asia Studies, 58(1), 81-102. https://doi.org/10.1080/09668130500401707
86. Wooldridge, J.M. (2002). Econometric Analysis of Cross Section and Panel Data. Cambridge, MA: The MIT Press.
87. Zygmunt, J. (2018). Entrepreneurial activity drivers in the transition economies. Evidence from the Visegrad countries. Equilibrium. Quarterly Journal of Economics and Economic Policy, 13(1), 89-103. https://doi.org/10.24136/eq.2018.005