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Genetic distance and the difference in new firm entry between countries

Author

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  • Maria João Guedes

    (Universidade de Lisboa)

  • Nicos Nicolaou

    (University of Warwick)

  • Pankaj C. Patel

    (Villanova University)

Abstract

Does genetic distance between countries explain differences in the level of entrepreneurship between them? Genetic distance, or very long-term divergence in intergenerationally transmitted traits across populations, has been recently tied to a variety of outcomes ranging from differences in economic development to differences in risk preferences between countries. Extending this recent work, we ask whether the genetic distance between countries is associated with differences in new firm entry. Based on a sample of 103 countries and 5253 country-pair observations and controlling for a large variety of factors, we find that genetic distance is positively associated with between country differences in new firm entry. The effects sizes, as expected, are small. In assessing the differences in entrepreneurial activity between country-pairs, policymakers could consider adjusting for genetic distance as an explanation for differences in entrepreneurial activity.

Suggested Citation

  • Maria João Guedes & Nicos Nicolaou & Pankaj C. Patel, 2019. "Genetic distance and the difference in new firm entry between countries," Journal of Evolutionary Economics, Springer, vol. 29(3), pages 973-1016, July.
    • Handle: RePEc:spr:joevec:v:29:y:2019:i:3:d:10.1007_s00191-019-00613-2
    DOI: 10.1007/s00191-019-00613-2
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    More about this item

    Keywords

    Genetic distance; Entrepreneurship; Comparative entrepreneurship; Country or areas study; New firm entry;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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