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Does cultural diversity help or hinder entrepreneurs? Evidence from eastern Europe and central Asia

Author

Listed:
  • Elena Nikolova

    (EBRD)

  • Dora Simroth

    (European School of Management and Technology)

Abstract

This paper studies the effect of religious and linguistic diversity in a given locality on individual entrepreneurial behaviour, and finds that cultural diversity and entrepreneurship follow an inverted U-shaped pattern. We make three theoretical contributions. Unlike previous research, we are able to analyse both the attempt to establish an entrepreneurial business (‘entrepreneurial trial’) and success of entrepreneurs. Moreover, we argue that the two types of diversity matter at different stages of entrepreneurship – religious diversity is tightly linked to entrepreneurial trial, while linguistic heterogeneity affects entrepreneurial success. In addition, by identifying a non-linear relationship between diversity and entrepreneurship, we put into perspective previous research that is divided on whether cultural heterogeneity positively or negatively affects firm, regional and country performance. We use a new survey data set that covers more than 30,000 households in eastern Europe and central Asia (the Life in Transition Survey 2010).

Suggested Citation

  • Elena Nikolova & Dora Simroth, 2013. "Does cultural diversity help or hinder entrepreneurs? Evidence from eastern Europe and central Asia," Working Papers 158, European Bank for Reconstruction and Development, Office of the Chief Economist.
    • Handle: RePEc:ebd:wpaper:158
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    Citations

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    Cited by:

    1. Elvin Afandi & Majid Kermani, 2014. "Bridging the Gender Gap in Entrepreneurship: Evidence from Europe," William Davidson Institute Working Papers Series wp1074, William Davidson Institute at the University of Michigan.
    2. Ahmad Isa Abdullahi & Fakhrul Anwar Zainol, 2016. "The Impact of Socio-cultural Business Environment on Entrepreneurial Intention: A Conceptual Approach," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(2), pages 80-94, February.
    3. Elvin Afandi & Majid Kermani, 2015. "Bridging The Gender Gap In Entrepreneurship: An Empirical Analysis," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-22.
    4. Elvin Afandi & Majid Kermani & Fuad Mammadov, 2017. "Social capital and entrepreneurial process," International Entrepreneurship and Management Journal, Springer, vol. 13(3), pages 685-716, September.
    5. Roxana Gutiérrez-Romero, 2020. "The contrasting effects of ethnic, cultural and immigrant diversity on entrepreneurship and job creation," Working Papers 101, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    6. Roxana Gutiérrez-Romero, 2023. "Businesses create more jobs in countries with higher share of immigrants because of skill complementarity," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 13(1), pages 1-18, December.
    7. Dakung Reuel Johnmark & Tsenba Wummen Soemunti & Orobia Laura & John C. Munene & Waswa Balunywa, 2016. "Disabled students’ entrepreneurial action: The role of religious beliefs," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1252549-125, December.

    More about this item

    Keywords

    entrepreneurship; transition region; diversity;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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