The Prevalence and Determinants of Social Entrepreneurship at the Macro Level

The present cross-national study aims to explore the factors that are associated with a country's share of social start-ups in the total number of start-ups and contributes to the emerging stream of literature that explores the contextual drivers of different types of entrepreneurship. Based on data from the Global Entrepreneurship Monitor (GEM) 2009, covering 49 countries, we test several theoretical perspectives, including the failure thesis/institutional void perspective, the interdependence theory/institutional support perspective, welfare state theory and supply-side theory. Multiple regression analyses are applied testing the influence of institutional factors and cultural values on the incidence of social entrepreneurial start-ups relative to other types of start-ups. Our results seem to support the institutional support perspective: the share of social start-ups in all start-ups seems to benefit from favorable institutional circumstances, in particular public sector expenditure and regulatory quality. With respect to cultural values, our results suggest that a society's level of self-expression values benefits start-up diversity in favor of a higher share of social start-ups.