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Entrepreneurial readiness in the context of national systems of

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Entrepreneurial readiness in the context of
national systems of entrepreneurship

R. Sandra Schillo, Ajax Persaud & Meng

Jin

Small Business Economics

An Entrepreneurship Journal

ISSN 0921-898X

Small Bus Econ

DOI 10.1007/s11187-016-9709-x

1 23
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 Author's personal copy
Small Bus Econ
DOI 10.1007/s11187-016-9709-x
Entrepreneurial readiness in the context of national systems
of entrepreneurship
R. Sandra Schillo . Ajax Persaud . Meng Jin
Accepted: 20 January 2016
Ó Springer Science+Business Media New York 2016
Abstract This study contributes to the emerging
stream of literature on national systems of
entrepreneurship by investigating the importance of
systemic contingencies between individual-level and
country-level variables. Specifically, we develop the
concept of entrepreneurial readiness as a factor
consisting of four items relating to individuals’ skills,
fear of failure, social connectedness, and opportunity
perception. The results indicate that this entrepreneurial
readiness construct is a more parsimonious and cogent
representation of individual-level characteristics than
several loosely connected individual traits. Moreover,
we demonstrate that entrepreneurial readiness has
substantial explanatory power with regard to individ-
uals’ entrepreneurial intention. Individuals’ entrepre-
neurial intentions are also influenced by several
dimensions of the national environment such that
entrepreneurial readiness and these national environ-
mental conditions are mutually reinforcing. These
findings lend support to the importance of viewing
entrepreneurship from a systems perspective and
R. S. Schillo (&)
Telfer School of Management and Institute for Science,
Society and Policy, University of Ottawa, 55 Laurier Ave
E., Ottawa, ON K1N 6N5, Canada
e-mail: schillo@telfer.uottawa.ca
A. Persaud
M. Jin
Telfer School of Management, University of Ottawa,
Ottawa, Canada
underscore the importance of institutional conditions
in fostering entrepreneurship.
Keywords National system of entrepreneurship

Multilevel analysis
Entrepreneurial readiness

Institutional pillars (regulative, normative, cognitive,
and conducive)
JEL Classifications L26
L53
O38
O57
1 Introduction
Entrepreneurship research has focused primarily on
individual-level attributes of entrepreneurs and new
ventures while largely ignoring system-level con-
straints and outcomes (Shane and Venkataraman
2000). This focus has placed the actions of individuals
as key to the entrepreneurial process and the objective
existence of opportunities as secondary (Acs et al.
2014; Alvarez and Barney 2007), as long as individ-
uals form the belief that an opportunity exists and its
pursuit is feasible (McMullen and Shepherd 2006).
Unfortunately, this approach has provided little
insights on why the rates of entrepreneurial activity
differ across countries (Stenholm et al. 2013) or even
among regions of the same country (Bruton et al.
2010). Recently, scholars have been coalescing around
the notion that country differences in entrepreneurial
activities may be linked to national institutional
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 Author's personal copy
environments (e.g., Aidis et al. 2008; Autio and Acs
2010; De Clercq et al. 2013; Estrin et al. 2013;
Stenholm et al. 2013; Urbano and Alvarez 2014). In
this context, Acs et al. (2014) propose a national
systems of entrepreneurship (NSE) perspective that
emphasizes the integration of individual-level and
system-level factors.
The NSE perspective argues that feasibility and
desirability considerations are influenced by contex-
tual factors such as resource availability, social norms,
and attitudes, which are not explicitly articulated in the
action theory of entrepreneurship (Acs et al. 2014).
The central tenet of the NSE perspective is that there
are two levels of analyses, the individual level and the
country level, and considering one without the other
could result in an incomplete understanding of vari-
ances in entrepreneurial activities across countries. De
Clercq et al. (2013) point out that the intricate
interplay between individual- and institutional-level
factors has barely been examined. Indeed, most
studies that investigate new venture creation focus
on one of two levels, either the individual level or the
role of institutions (Autio and Acs 2010; Phan 2004).
Multilevel studies that integrate both individual- and
country-level institutional factors are now emerging
(e.g., De Clercq et al. 2013; Estrin et al. 2013;
Stenholm et al. 2013; Urbano and Alvarez 2014), but
much more research is needed. Understanding the
interaction between the individual and the institutional
contexts could help explain observed differences in
cross-country entrepreneurial activity.
Our study is in response to the call for more
empirical multilevel cross-country analyses on the
interaction of individual-level factors and the systemic
contexts in influencing entrepreneurial activity (Sten-
holm et al. 2013; De Clercq et al. 2013). Our first
contribution is at the individual level, where we
propose a refined measure of entrepreneurial readiness
and show that it is a strong predictor of entrepreneurial
intention. We then show that entrepreneurial readiness
explains variation in entrepreneurial intention
between countries and that entrepreneurial readiness
interacts with four NSE dimensions, namely regula-
tive, normative, cognitive, and conducive. These
interactions suggest that institutional systems are
associated with differences in entrepreneurial inten-
tion among individuals with higher versus lower
entrepreneurial readiness. In this sense, our study
provides policy guidance with regard to encouraging
123
R. S. Schillo et al.
more promising entrepreneurs to engage in new
venture creation.
This article is organized as follows. Section 2
provides a theory-based discussion of the link between
institutions and entrepreneurship, which is central to
the NSE perspective. Section 3 presents the theoret-
ical framework employed and the hypotheses that are
tested in the study. Section 4 describes the data and
analytical approaches utilized. Section 5 presents the
results. Section 6 highlights the theoretical and policy
implications of the study and the conclusions.
2 NSE and institutions
The NSE concept focuses on system-level constraints,
opportunities, and outcomes from a national perspec-
tive. Differences in NSEs can be observed by exam-
ining the nature and workings of national institutions.
Thus, institutional theory is considered an appropriate
theoretical framework. Institutional theory postulates
that human behavior is determined by the institutional
environment in which they find themselves (North
1990). Thus, institutions set the boundary conditions
for human and economic interactions including the
decision to start a new business (Baker et al. 2005;
Bowen and De Clercq 2008). Institutions regulate
individual firm behavior, assist in reducing uncertainty
and risk (Smallbone and Welter 2012), help create
trust, and reduce transaction costs associated with new
business creation by defining acceptable and unac-
ceptable behavior (Bruton et al. 2010).
Institutions are either formal or informal. Formal
institutions pertain to laws, regulations, constitution,
and contracts, while informal institutions refer to
attitudes, norms, values, and the culture of the society.
Informal institutions influence how formal institutions
operate in practice (North 1990). From an
entrepreneurship perspective, the institutional envi-
ronment creates entrepreneurial opportunities and
limitations and thus affects entrepreneurial rates
(Aldrich and Fiol 1994; Hwang and Powell 2005).
Functional institutional environments provide incen-
tives for productive entrepreneurial activity to flour-
ish, while weak ones may exert adverse effects on such
activity (Baumol 1990; van Stel and Storey 2004; Dau
and Cuervo-Cazurra 2014). Highly uncertain and
rapidly changing environments (Aidis et al. 2008),
deficient institutions and weak enforcement encourage
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Entrepreneurial readiness in the context of national systems of entrepreneurship
corruption by state agencies and deviant entrepreneur-
ial behavior (Smallbone and Welter 2012). Unpro-
ductive or destructive entrepreneurship (Baumol
1990) tends to flourish in these situations. Thus,
institutions do not always lead to productive
entrepreneurship as is often assumed in the literature
(Smallbone and Welter 2012; Bruton et al. 2010).
However, institutions can legitimize or delegitimize
business activity as socially valued or attractive and
promote and constrain the entrepreneurial spirit (Ur-
bano and Alvarez 2014). In any event, individuals will
evaluate the incentives resulting from both formal and
informal institutions before deciding to embark on
entrepreneurial activities (Aidis et al. 2008). Conse-
quently, it is expected that differences in national
institutional contexts and enforcement mechanisms
may lead to variations in the quantity and quality of
entrepreneurship (Oliver 1991; Baker et al. 2005).
Formal and informal institutions have been further
categorized into three institutional pillars, regulative,
normative, and cognitive (Scott 1995; Kostova 1997;
North 1990; Busenitz et al. 2000). Applying these
pillars, researchers have shown that national institu-
tional differences account for variations in entrepre-
neurial activities (Oliver 1991; Sobel 2008). Even
though it is generally accepted that institutional factors
influence economic growth, Stenholm et al. (2013)
argue that it is still unclear how these three institu-
tional pillars facilitate productive or destructive
entrepreneurial behavior (Baumol et al. 2007). It has
been argued that even if there is a functional environ-
ment that promotes entrepreneurship, additional insti-
tutional arrangements are needed to promote growth
and innovation-oriented entrepreneurial activity (Ano-
khin and Schulze 2009). The institutional environ-
ments must be suited to innovation-oriented
entrepreneurship or else the technological change
produced by innovation-oriented entrepreneurship
will be difficult to establish and enhance (Anokhin
and Wincent 2012). In order to better understand this
aspect, Stenholm et al. (2013) introduced a fourth
institutional pillar, the conducive dimension, which
delineates the relationship between institutions and the
type of opportunities that are exploited in a country.
These four institutional dimensions are at the core of
our analytical model, which is depicted in Fig. 1 and
described in the following section.
3 Conceptual framework
Figure 1 shows that the relationship between entre-
preneurial readiness and entrepreneurial intent is
moderated by the institutional environment.
3.1 Entrepreneurial readiness
From an individual-level perspective, studies have
shown that social resources controlled by individuals
(Driga et al. 2009; Estrin and Mickiewicz 2011; Maula
et al. 2005) and personal willingness to be self-
employed (Mitchell et al. 2000) are important deter-
minants of new venture creation. Similarly, Busenitz
and Lau (1996) and Mitchell et al. (2000) argue that
the cognitive ability of individual entrepreneurs is an
important resource that predicts venture creation.
These cognitive resources are embodied in an indi-
vidual’s entrepreneurial capability and entrepreneurial
willingness, both of which are positively associated
with venture creation decisions (Mitchell et al. 2000).
In line with these arguments and based on social
cognitive theory, Lau et al. (2012) define entrepre-
neurial readiness as ‘‘an individual’s cognitive attri-
butes of capability and willingness to direct behavior
in an entrepreneurial context’’ (p. 148). Lau et al.’s
(2012) definition of entrepreneurial readiness is
adapted in this study and complemented with a two
additional components. One component relates to the
existence and perception of entrepreneurial opportu-
nities (Renko et al. 2012), which would contribute to
an individual’s readiness to engage in entrepreneur-
ship. The other component is a person’s social
network, which is a crucial aspect when making
judgements about the feasibility and desirability of
entrepreneurial opportunities and their ability to
exploit such opportunities (Westlund and Bolton
2003). Individuals with strong social networks may
feel more confident in new venture creation because
that they are better positioned to complement their
personal resources through their social networks (De
Clercq et al. 2013). Thus, the more capable and willing
an individual is, the more opportunities they perceive;
and the greater their social networks are, especially
within a business context, the more likely they will
have positive views of entrepreneurship. Thus, we
hypothesize that:
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Fig. 1 Conceptual
framework Regulave
Dimension
H2a(+)
H2b (+)
Entrepreneurial
Readiness
Hypothesis 1 There is a positive relationship
between individual entrepreneurial readiness and
individuals’ intention to start a business.
3.2 Regulative dimension
The regulative dimension stems from laws, regulation,
rules, government policies, industrial agreements, and
standards (Bruton et al. 2010) that exert positive or
negative effects on individual entrepreneurial behav-
ior and businesses (Scott 1995). For instance, regula-
tions can promote entrepreneurship by making it easy
to start, conduct, or close a business, or they may
discourage entrepreneurial actions by increasing the
complexities of performing these activities (Veciana
and Urbano 2008). Dana (1990) shows that potential
entrepreneurs may be dissuaded from starting a new
business if there are too many cumbersome rules and
procedures to follow. Regulations and laws may also
influence the ability of entrepreneurs to acquire the
resources required to create new businesses (Busenitz
et al. 2000).
Entrepreneurial opportunities tend to be higher in
economies with less regulation, free markets, and few
barriers to entry (El-Namaki 1988). In countries with
unstable regulative arrangements and extensive gov-
ernment, new business formation will suffer (Aidis
2005), especially innovation-based businesses (Ano-
khin and Schulze 2009). While strong rules governing
intellectual property rights encourage entrepreneurial
behavior (Autio and Acs 2010), weak enforcement of
formal rules and policies may lead to unproductive
entrepreneurship in a country (Aidis et al. 2008).
Government policies that promote entrepreneurship
include lowering entry barriers for new business start-
ups, reducing barriers to growth and expansion
through labor and tax policies (van Stel et al. 2007),
improving access to financing and credits (Spencer
and Gómez 2004), and providing information,
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R. S. Schillo et al.
Normave Cognive Conducive
Dimension Dimension Dimension
H3a (+) H4a(+) H5a(-)
H3b (+) H4b (+) H5b (+)
Start-Up
H1(+)
Intenons
training, and other entrepreneurial support programs
(Gnyawali and Fogel 1994). Based on these argu-
ments, we hypothesize that:
Hypothesis 2a A country’s regulatory freedom is
positively related to individuals’ intention to start a
business.
Hypothesis 2b The relationship between individu-
als’ entrepreneurial readiness and their intention to
start a business is positively moderated by the
regulatory dimension of NSEs.
3.3 Normative dimension
The normative dimension regulates behavior through
social norms, values, and beliefs (Busenitz et al.
2000), which are often accepted on moral or ethical
grounds or in conformance to established practices
that are shared socially (Hofstede 1980). The norma-
tive dimension regulates behavior by defining what is
appropriate or expected in various social and com-
mercial situations (Bruton et al. 2010), especially in
the absence of formal regulations (Tan et al. 2009).
From the perspective of entrepreneurship, norms and
values influence the extent to which individuals within
a particular environment value creative and innovative
thinking and consider entrepreneurship a desirable
career (Busenitz et al. 2000). If entrepreneurship is
highly valued, more individuals will form entrepre-
neurial intentions (Krueger et al. 2000). Similarly, the
visibility and publicity ascribed to successful
entrepreneurship may positively influence entrepre-
neurial intent even in countries where such a culture
does not yet exist (Lounsbury and Glynn 2001).
Favorable impressions of entrepreneurial activity
through the media can also lead to greater appreciation
of entrepreneurship (Verheul et al. 2002). Therefore,
we posit that:
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Entrepreneurial readiness in the context of national systems of entrepreneurship

Hypothesis 3a A country’s positive norms toward 2008). Such a system increases the available pool of
entrepreneurship are positively related to individuals’ knowledgeable individuals who can help leverage
intention to start a business. individual-level resources toward new business cre-
ation (De Clercq and Arenius 2006). Also, the
Hypothesis 3b The relationship between individu-
prevalence of entrepreneurship-oriented training in
als’ entrepreneurial readiness and their intention to
the educational system promotes awareness of
start a business is positively moderated by the
entrepreneurship as a career choice, particularly in
normative dimension of NSEs.
terms of its opportunities and risks (Peterman and
Kennedy 2003). Thus, we posit:
3.4 Cognitive dimension
Hypothesis 4a The extent to which a country’s
The cognitive dimension is important to entrepreneur- cognitive dimension addresses entrepreneurship is
ship research in terms of understanding how societies positively related to individuals’ intention to start a
inculcate values or create cultural environments where business.
entrepreneurship is accepted and encouraged (Bruton
Hypothesis 4b The relationship between individu-
et al. 2010; Bosma et al. 2009; Harrison 2008). It
als’ entrepreneurial readiness and their intention to
represents the shared social reality and frames through
start a business is positively moderated by the
which individuals interpret information (Urbano and
cognitive dimension of NSEs.
Alvarez 2014; Stenholm et al. 2013). From an
entrepreneurship perspective, it captures the knowl-
3.5 Conducive dimension
edge and skills possessed by people pertaining to new
business creation provided through the educational
Stenholm et al. (2013) introduce the conducive
system (De Clercq et al. 2013). Cognitive structures
dimension, which focuses on the types of institutions
are shaped by the nature and quality of the education
needed to support the emergence of high-impact firms
system, particularly business education and skills and
(Autio and Acs 2010). They argue that high-impact
influence the degree to which people feel they are
firms promote new innovation and knowledge-driven
capable of creating a new venture (Verheul et al. 2002;
economic growth and therefore need institutions that
Levie and Autio 2008). Low levels of business
support innovation-driven entrepreneurship. These
knowledge and skills could reduce an individual’s
include ‘‘feeder’’ industries and institutions; the pres-
inclination to start a business, whereas those who
ence of highly skilled labor; accessibility of suppliers
believe they have the knowledge and skills will be
and customers; and proximity to high-quality univer-
more motivated to start a new business (Arenius and
sities (Stenholm et al. 2013). Anokhin and Wincent
Minniti 2005).
(2012) add that the presence of public and private
From an institutional perspective, countries where
investments in research and development is also
business and entrepreneurship knowledge and skills
critical, in that they enhance absorptive capacity, as
are more widespread are likely to have higher levels of
well as the availability of highly skilled individuals
entrepreneurial activities (Urbano and Alvarez 2014)
willing to innovate and able to appropriate the benefits
because individuals are better positioned to recognize
of their innovation. These elements generate innova-
and exploit opportunities (Kirzner 1973), convince
tiveness and encourage productive entrepreneurship
others to support their new ventures, and deal with the
(Baumol et al. 2007), also allowing entrepreneurs to
challenges of creating and managing a new business
become conduits for knowledge spillovers (Acs et al.
(De Clercq et al. 2010; Begley et al. 2005). A
2013).
developed educational system can ensure a steady
Anokhin and Wincent (2012) argue that the liter-
supply of people with the requisite knowledge and
ature linking start-up rates to innovation is sparse and
skills to undertake entrepreneurial ventures (Mitchell
the evidence is primarily indirect, even though a
et al. 2000; Bosma and Levie 2010). Further, an
positive relationship is often assumed (e.g., McMullen
education system that devotes attention and resources
et al. 2008; Bygrave et al. 2003). Pointing to recent
specifically to entrepreneurship is more likely to affect
evidence, Anokhin and Wincent (2012) contend that
entrepreneurial intentions (Bowen and De Clercq
there are serious doubts regarding the expectations of a

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uniform positive relationship between innovation and
entrepreneurship (Shane 2009; Hurst and Lusardi
2004). Shane (2009) also emphasizes that most start-
up activities do not involve high-quality business
opportunities that could lead to innovation due to the
increasing opportunity costs associated with innova-
tion. Furthermore, one might expect that if countries
have strong institutional support for innovation, as
measured in the conducive dimension, individuals
who are deeply motivated by innovative activities can
pursue them within incumbent organizations, rather
than having to engage in entrepreneurship. Thus, we
hypothesize that:
Hypothesis 5a The conducive dimension is nega-
tively related to entrepreneurial intention.
Hypothesis 5b The relationship between individu-
als’ entrepreneurial readiness and their intention to
start a business is positively moderated by the
conducive dimension of NSEs.
3.6 Control variables
Since we are conducting a multilevel study, we have
control variables for both the individual and country
levels. At the country level, we control for differences
in economic development and country size using GDP
and population size. At the individual level, we control
for age, gender, income, and education. The research
evidence from GEM suggests that men are far more
likely to be engaged in entrepreneurial activities than
women (Neck et al. 2003; Minniti et al. 2005). Age
was also found to influence entrepreneurial growth
aspirations (Kolvereid 1992). Further, the probability
of people becoming self-employed seems to vary with
age as relatively more business owners are between 25
and 45 years (Reynolds et al. 2002) and nascent
business owners are in the younger 25–34 age
category (Delmar and Davidsson 2000). The evidence
also suggests that individuals with higher incomes and
resources at their disposal are more likely to pursue
self-employment opportunities. In terms of education,
the evidence appears to be mixed. In some studies, it
has positive influence on entrepreneurial activities
(Davidsson and Honig 2003), while in others higher
education level is associated with lower self-employ-
ment levels (Uhlaner and Thurik 2004). De Wit and
Van Winden (1989) and Blanchflower (2004) found
that education is positively correlated with self-
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R. S. Schillo et al.
employment in the USA but is negatively related in
Europe. Parker (2004) suggests that entrepreneurs
generally tend to be more educated than non-
entrepreneurs.
4 Data and analysis methods
4.1 Data
To test our hypotheses, we combined data from the
2012 adult population survey from the Global
Entrepreneurship Monitor (GEM) survey with a
number of additional, country-level data sources.
The initial GEM data set includes 67 countries with
responses from 198,391 individuals. Because institu-
tions tend to evolve relatively slowly over time and
their influence on individuals is expected to manifest
over time (North 1990; Klyver et al. 2013), we
combined the 2012 GEM individual data with coun-
try-level data averaged over the period leading up to
the individual-level survey, namely the years
2009–2012. This approach has been used in previous
studies (e.g., De Clercq et al. 2010; Klyver et al. 2013)
in order to increase the country sample size, especially
when data are incomplete for certain years. We
selected items from the World Bank’s Ease of Doing
Business (EBDI) index (The World Bank 2008, 2011),
the Index of Economic Freedom (IEF; Miller et al.
2009, 2012; Miller and Holmes 2010; Miller and
Holmes 2011), the Global Competitiveness Index
(GCI; Sala-i-Martin et al. 2009, 2012), and the
country-level national expert survey portion of GEM
(NES; Bosma and Levie 2010; Kelley et al. 2011,
2012; Xavier et al. 2013), as described below. We
included all countries for which all variables were
available, resulting in a data set of 63 countries (see
Table 1) with 123,020 individual responses1 available
for most analyses.
4.2 Variables
The dependent variable future start-up is a binary
measure of an individual’s intent to start a business in
1
Spain and Brazil were relatively overrepresented in the data
set, with N = 21,900 and N = 10,000, respectively. We
randomly selected 4000 responses from these two countries to
ensure a more balanced sample.
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Entrepreneurial readiness in the context of national systems of entrepreneurship

Table 1 List of countries

Country Frequency % Country Frequency %

Algeria 4995 3.1 Lithuania 2003 1.3

Angola 2636 1.6 Macedonia 2003 1.3
Argentina 2018 1.3 Malawi 2006 1.3
Austria 4583 2.9 Malaysia 2006 1.3
Belgium 2010 1.3 Mexico 2516 1.6
Bosnia and Herzegovina 2001 1.2 Namibia 1959 1.2
Botswana 2003 1.3 Nigeria 2657 1.7
Brazil 4000 2.5 Norway 2000 1.2
Chile 2420 1.5 Pakistan 2000 1.2
China 3684 2.3 Panama 1998 1.2
Colombia 6471 4 Peru 2071 1.3
Costa Rica 2041 1.3 Poland 2003 1.3
Croatia 2000 1.2 Portugal 2001 1.2
Denmark 2217 1.4 Romania 2004 1.3
Ecuador 2004 1.3 Russia 3541 2.2
Egypt 2501 1.6 Singapore 2001 1.2
El Salvador 2180 1.4 Slovakia 2000 1.2
Estonia 2004 1.3 Slovenia 2010 1.3
Ethiopia 3005 1.9 South Africa 2928 1.8
Finland 2038 1.3 Spain 4000 2.5
France 4003 2.5 Sweden 2500 1.6
Germany 4300 2.7 Switzerland 2003 1.3
Ghana 2222 1.4 Taiwan 2009 1.3
Greece 2000 1.2 Thailand 3000 1.9
Hungary 2000 1.2 Tunisia 2000 1.2
Iran 3178 2 Turkey 2401 1.5
Ireland 2000 1.2 Uganda 2343 1.5
Israel 2007 1.3 United Kingdom 2000 1.2
Italy 2000 1.2 United States 5542 3.5
Jamaica 2003 1.3 Uruguay 2016 1.3
Japan 2010 1.3 Zambia 2157 1.3
Latvia 2000 1.2 Total 160,206 100.0

the future, obtained from the 2012 GEM Adult
Population Survey. It asks: ‘‘Are you, alone or with
others, expecting to start a new business, including any
type of self-employment, within the next three years?’’
Responses are coded 1 for yes, 0 for no.
Our individual-level explanatory variable entrepre-
neurial readiness measures an individual’s perceived
readiness to engage in entrepreneurial ventures. It is a
composite factor comprising the dimensions of skills
relating to starting a business, fear of failure, knowing
other entrepreneurs, and perceived opportunities for
successful businesses. All items are derived from the
GEM Adult Population Survey, and the details of the
factor analysis are reported below.
We include several country-level explanatory vari-
ables measuring the four dimensions of national
institutions—regulative, normative, conducive, and
cognitive. The items pertaining to these dimensions
are described below and presented in Table 2.
The regulative dimension is defined using four
items measuring different aspects of regulatory free-
dom. We use items relating to regulations on finance,

123
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R. S. Schillo et al.

Table 2 Factors and items

Dimension Variable Description Data Min. Max. Mean S.D.
source

Regulative Reg1 Ease of starting up a business indicates the effect of the regulatory EDBI 42.00 95.75 81.08 11.77
environment on start-ups in a country by identifying the
bureaucratic and legal hurdles an entrepreneur must overcome to
incorporate and register a new firm
Reg2 Financial freedom is an indicator of banking efficiency as well as IEF 10.00 90.00 57.34 16.51
a measure of independence from government control and
interference in the financial sector
Reg3 Investment freedom evaluates a variety of regulatory restrictions IEF 2.50 91.25 61.67 19.66
that are typically imposed on investment
Reg4 Trade freedom is a composite measure of the extent of tariff and IEF 49.52 90.00 79.75 9.07
non-tariff barriers that affect imports and exports of goods and
services
Normative Nor1 Financial success is an indicator assessing whether the creation of NES 2.36 4.23 3.40 0.41
new ventures is considered an appropriate way to become rich
Nor2 Status indicates whether successful entrepreneurs have a high NES 2.77 4.57 3.71 0.46
level of status and respect
Nor3 Media is an indicator of how often stories about successful NES 2.30 4.43 3.46 0.49
entrepreneurs appear in the public media
Nor4 Recognition indicates whether entrepreneurs are considered as NES 2.58 4.44 3.55 0.46
competent, resourceful individuals
Cognitive Cog1 Experiential education indicates whether teaching in primary and NES 1.30 3.01 2.19 0.35
secondary education encourages creativity, self-sufficiency, and
personal initiative
Cog2 Economic education is an indicator of the extent to which primary NES 1.31 2.73 2.02 0.29
and secondary education provides adequate instruction in market
economic principles
Cog3 Start-up education indicates the extent to which primary and NES 1.27 2.69 1.87 .30
secondary education provides adequate attention to
entrepreneurship and new firm creation
Conducive Con1 Company spending on R&D indicates the extent to which GCI 2.26 5.95 3.59 1.03
companies spend on R&D
Con2 Capacity for innovation indicates how companies obtain GCI 1.65 5.86 3.58 1.06
technology
Con3 Production process indicates the sophistication of production GCI 2.35 6.44 4.17 1.13
processes
Con4 Research institutions indicate the quality of scientific research GCI 1.51 6.22 4.21 1.03
institutions
Con5 Scientists and engineers indicate the availability of scientists and GCI 2.64 6.00 4.33 0.78
engineers in the country
GCI Global Competitiveness Index (Sala-i-Martin et al. 2009, 2010, 2011, 2012), NES Global Entrepreneurship Monitor
(2010–2013), National Expert Survey, EBDI World Bank’s Ease of Doing Business Index (The World Bank 2008, 2009, 2010, 2011),
IEF Index of Economic Freedom (Miller et al. 2009–2012)

investments, and trade from the IEF database, and
complement them with an item from the EDBI
database measuring the ease of starting up a business.
We measure the normative dimension through a range
of items derived from the GEM NES survey, including
the level of status and respect entrepreneurs enjoy,
media attention to successful entrepreneurs, recogni-
tion of entrepreneurs as competent individuals, and
perceptions on wealth generation through
entrepreneurship. The conducive dimension includes
five items from the GCI database, namely company
spending on R&D, capacity for innovation, production

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Entrepreneurial readiness in the context of national systems of entrepreneurship
process sophistication, quality of research institutions,
and availability of scientists and engineers. Our focus
in the cognitive dimension is on the education system,
and thus, we use items from the GEM NES and
measure to what extent entrepreneurship is addressed
in the education system in terms of experiential
entrepreneurship education, economic education, and
education on firm formation. In addition to the
explanatory variables, we include a range of control
variables. At the individual level, we control for the
respondents’ age, mean centered, and the squared term
for age; gender (1 = male, 0 = female); three house-
hold income categories (low, middle, and high); and
four educational categories (primary, secondary, post-
secondary, and graduate experience). At the national
level, we control for gross domestic product (GDP)
and population size.
4.3 Analysis methods
We initially conducted an exploratory factor analysis
(EFA) to determine the factor structure underlying the
16 items that represent the country-level institutional
environment. The principal component analysis using
varimax rotation with Kaiser Normalization (SPSS
v.21; IBM Corp 2012) yielded a rotated factor matrix
with four distinct factors (KMO = 0.81, p \ 0.001).
The extracted factors correspond to the structure
presented in Table 2.2 Cronbach’s alpha scores for the
factors confirm the reliability of the derived factor
structure (regulative: a = 0.86; normative a = 0.88;
cognitive a = 0.93; conducive a = 0.97; entrepre-
neurial readiness a = 0.89).
To confirm these factors, we conducted a partial
least squares-based confirmatory factor analysis (us-
ing smartPLS; Ringle et al. 2005). This methodology
is better suited to the data set of 63 countries than
covariance-based confirmatory factor analysis (Hair
et al. 2011). All factors were modeled as reflective
constructs (Diamantopoulos and Winklhofer 2001),
based on preliminary analyses. Reliability of the
2 between countries are not due to variations in the
Item loadings are high (normative 0.74–0.91; cognitive
0.90–0.94; conducive 0.87–0.95; entrepreneurial readiness
0.78–0.92). The regulative factor contains one item, regulations
pertaining to starting a business, with a relatively low loading of
0.52 (remaining range 0.8–0.9) and a squared AVE that is
slightly higher than the correlation with the conducive factor.
Nevertheless, we retained this item due to its conceptual
importance.
factors was further confirmed based on the composite
reliability (CR) scores (all are [ 0.7; Hair et al. 2010).
Convergent validity is evidenced by average variance
extracted (AVE) scores (all are [ 0.5), and
CR [ AVE for all factors (Hair et al. 2010; see
Table 3). The maximum shared squared variances, as
well as the average squared variances, are smaller than
the AVE scores for all factors, indicating discriminant
validity (Hair et al. 2010; also see footnote 2). In
addition, cross-loadings suggest good discriminatory
validity.
Our data consist of a cross-sectional panel data set,
grouped by country. As a consequence, the assumption
of independence of observations is violated (Hofmann
et al. 2000) and we used a multilevel logit model to
account for the country groupings (Guo and Zhao
2000). Multilevel models provide a framework to
account for the hierarchical nature of the data,
correcting for biases in parameter estimates resulting
from clustering (Guo and Zhao 2000).
Multilevel models are appropriate if there is a
significant variance between groups, in this case,
countries. We determined that this is the case by
testing a random intercept model with only the
individual-level control variables as predictors (see
Table 4, Model 1). The results provide strong evi-
dence that the between-country variance is nonzero
(v2(10) = 17,457.44; p \ 0.001). The intraclass cor-
relation coefficient of 24 % is relatively high (Autio
and Acs 2010), further suggesting that the country-
level variance is significant. To visualize this result,
Fig. 2 shows the country effects (residuals) obtained
from the random intercept model. The plot shows the
estimated residuals u0j for all 63 countries in the
sample. For most countries, the 95 % confidence
interval does not overlap the horizontal line at zero,
indicating that entrepreneurial intentions in these
countries are significantly above or below average.
In addition, the random country effect variance with
control variables is equal to the random country effect
variance of the null model without any control
variables (not reported). This suggests that differences
sample composition across countries with regard to
the control variables, but rather relate to the focal
variables of this study.
We use multilevel logistic regression with random
intercepts to test the hypotheses. The interaction terms
were formed by multiplication of the standardized
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R. S. Schillo et al.

Table 3 Factor validity

Mean SD Alpha CR AVE Latent variable correlations
1 2 3 4 5

Regulative 72.35 11.13 0.86 0.91 0.71 1.00

Normative 3.54 0.39 0.88 0.91 0.72 -0.16 1.00
Cognitive 2.03 0.29 0.94 0.92 0.79 0.29 0.22 1.00
Conducive 3.99 0.94 0.97 0.98 0.89 0.58 -.05 .023 1.00
Entrepreneurial readiness (country level) 39.32 11.97 0.89 0.93 0.75 -0.49 0.39 0.03 -0.54 1.00

direct effects (grand means) to test the moderation
effects (Hofmann and Gavin 1998; Dawson 2014). We
confirmed that multicollinearity was not a concern by
calculating variance inflation factors (VIF) based on
Model 5 (see Table 4); all VIFs were well below 10
(Hair et al. 2010).
5 Results
We present several models in Table 4 to test the
hypotheses. The first two models focus on the
individual level. Model 1 shows that the individual-
level control variables are significant, with the excep-
tion of household income, of which only one category
is marginally significant. Model 2 shows a strong
positive effect of individual-level entrepreneurial
readiness (b = 1.224, p \ 0.001), which significantly
improves the model as compared to Model 1. The
random effect variance is reduced to 0.74
(ICC = 18 %) suggesting considerable differences
in entrepreneurial readiness across countries. These
results support hypothesis 1, demonstrating a positive
effect of entrepreneurial readiness on start-up
intention.
This finding is further supported by Model 3. This
model introduces the country-level control variables
GDP and population (in logarithmic forms), which are
both relatively strong and significant, and which
improve model fit.3
Entrepreneurial readiness still remains significant,
and the effect is as strong as it was in Model 2. This
3
Note that when country level control variables are introduced
before entrepreneurial readiness, the strength of both coeffi-
cients is slightly higher and both are highly significant
(b(GDP(log)) = -1.72, p \ 0.001; b(Population(log)) = 0.76,
p \ 0.001). The ICC is 21 %.
suggests that the effect of individuals’ entrepreneurial
readiness is robust even when controlled for variables
at the country level.
Model 4 documents the effects of the country-level
institutional variables, as per hypotheses 2a, 3a, 4a,
and 5a. The regulative dimension, although positive as
per hypothesis 2a, is not significant (b = 0.21, n.s.).
The normative dimension is positive and significant
(b = 0.56, p \ 0.001), supporting hypothesis 3a. The
cognitive dimension is marginally significant, but with
a negative coefficient (b = -0.29, p \ 0.1), which is
contrary to hypothesis 4a. The conducive dimension is
negative, with a strong and highly significant coeffi-
cient (b = -0.88, p \ 0.1), in accordance with
hypothesis 5a. Thus, we find support for hypotheses
3a and 5a, but hypotheses 2a and 4a are not supported.
Model 5 includes the interaction terms between
individuals’ entrepreneurial readiness and the country-
level institutional variables. All four interaction terms
are significant, and three of the four effects are in the
hypothesized direction (regulative: b = 0.12,
p \ 0.001; cognitive: b = 0.12, p \ 0.01; and con-
ducive: b = 0.27, p \ 0.001). The interaction
between the normative dimension and entrepreneurial
readiness is negative (b = -0.28, p \ 0.001). Fig-
ure 3 shows the simple slope interaction plots for all
four interactions. Thus, hypotheses 2b, 4b, and 5b are
supported and we conclude that strong regulative,
cognitive, and conducive institutional environments
are associated with higher rates of entrepreneurial
intention among individuals with high entrepreneurial
readiness, as compared to those with low entrepre-
neurial readiness. In contrast, strong normative insti-
tutional environments are associated with higher
entrepreneurial intention among individuals with low
entrepreneurial readiness, as compared to those with
high entrepreneurial readiness.

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Table 4 Regression results

Dependent variable: entrepreneurial intention
Model 1 Model 2 Model 3 Model 4 Model 5

Age -0.79*** -0.78*** -0.78*** -0.78*** -0.77***

(0.02) (0.02) (0.02) (0.02) (0.02)
Age squared -0.71*** -0.58*** -0.58*** -0.58*** -0.59***
(0.04) (0.04) (0.04) (0.04) (0.04)
Male 0.38*** 0.25*** 0.25*** 0.25*** 0.24***
(0.01) (0.02) (0.02) (0.02) (0.02)
Middle income -0.01 -0.07*** -0.07*** -0.07*** -0.07***
(0.02) (0.02) (0.02) (0.02) (0.02)
High income 0.04* -0.10*** -0.10*** -0.10*** -0.11***
(0.02) (0.02) (0.02) (0.02) (0.02)
Primary education 0.19*** 0.13*** 0.13*** 0.13*** 0.14***
(0.03) (0.03) (0.03) (0.03) (0.03)
Secondary degree 0.22*** 0.15*** 0.15*** 0.15*** 0.16***
(0.03) (0.03) (0.03) (0.03) (0.03)
Post-secondary 0.36*** 0.23*** 0.23*** 0.23*** 0.24***
(0.03) (0.03) (0.03) (0.03) (0.03)
Graduate experience 0.34*** 0.18*** 0.18*** 0.18*** 0.17***
(0.04) (0.04) (0.04) (0.04) (0.04)
GDP (log) -1.34*** -0.52 -0.54*
(0.21) (0.32) (0.33)
Population (log) 0.56*** 0.08 0.10
(0.20) (0.31) (0.31)
Entrepreneurial readiness (ER) 1.22*** 1.22*** 1.22*** 1.28***
(0.02) (0.02) (0.02) (0.02)
Regulative 0.21 0.19
(0.27) (0.27)
Normative 0.56*** 0.60***
(0.16) (0.16)
Cognitive -0.29* -0.31*
(0.16) (0.17)
Conducive -0.88*** -0.91***
(0.22) (0.22)
ER 9 regulative 0.12***
(0.04)
ER 9 normative -0.28***
(0.04)
ER 9 cognitive 0.12***
(0.04)
ER 9 conducive 0.27***
(0.04)
Constant -1.47*** -1.36*** -1.39*** -1.40*** -1.39***
(0.13) (0.11) (0.09) (0.08) (0.08)
Random effect variance -1.05 -0.74 -0.44 -0.30 -0.31

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Table 4 continued
Dependent variable: entrepreneurial intention
Model 1
Observations 123,072
Akaike information criterion 117,872.60
Bayesian information criterion 117,979.60
Number of countries: 63
* p \ 0.1; ** p \ 0.05; *** p \ 0.01
Fig. 2 Country effects
6 Discussion
This study examines how individual-level and coun-
try-level institutional considerations interact to influ-
ence entrepreneurial intent. Studies that examine such
interactions are central to the emerging research on
NSE, which places considerable emphasis on identi-
fying the combinations of individual- and institu-
tional- level components that are conducive to the
various types of entrepreneurship (e.g., Stenholm et al.
2013; Acs et al. 2014; De Clercq et al. 2013). They can
also contribute to increased understanding of country
differences in entrepreneurship, with the ensuing
benefits for policy development.
This study introduced a new construct, entrepre-
neurial readiness, which captures key individual-level
characteristics in a parsimonious manner. The items
comprising this construct have been used in prior
research as separate variables (e.g., Urbano and
Alvarez 2014; De Clercq et al. 2013), but we show
that they jointly represents the broader concept of an
individual’s perceived readiness to engage in entre-
preneurial ventures. Conceptually, the integration of
these dimensions has been alluded to in the literature;
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R. S. Schillo et al.
Model 2 Model 3 Model 4 Model 5
123,020 123,020 123,020 123,020
112,420.40 112,392.5 123,376.40 112,209.20
112,537.10 112,528.60 112,551.30 112,423.00
for example, it is similar to the condition that Acs et al.
(2014) argue need to be satisfied in order for the
entrepreneurial resource allocation process to operate
efficiently: ‘‘[the right] individuals need to form
conjectures that entrepreneurial action is desirable
and feasible’’ (p. 479). Empirically, our analyses show
that the four items form a factor with substantial
explanatory power. In particular, we show that even
though individuals’ demographics are significant, they
are much less important than the entrepreneurial
readiness factor developed in this study. The multi-
level analysis also shows that differences in individ-
uals’ entrepreneurial readiness account for a
substantial portion of cross-country variation and they
are stronger predictors of entrepreneurial intent than
the country-level variables. Thus, variation in entre-
preneurial readiness seems to be part of the answer to
the open question in entrepreneurship research of how
national systems of entrepreneurship differ (Estrin
et al. 2013; de Clercq et al. 2013). From a policy
perspective, this insight also offers opportunities for
intervention, in that entrepreneurial readiness can
likely be influenced through skill formation, network-
ing, or similar programs, which reinforce entrepre-
neurial intent.
Our study also shows that the entrepreneurial
readiness factor interacts with country-level institu-
tional variables, suggesting that, indeed, complex
relationships between individuals and institutions
exist, supporting the call for a systemic view of
entrepreneurship. With regard to the four institutional
dimensions included in this study, the findings indicate
that that the regulatory dimension is not significant,
but the normative, cognitive, and conducive dimen-
sions are significant. However, all four interaction
effects between entrepreneurial readiness and the
country-level variables are significant.
 Author's personal copy
Entrepreneurial readiness in the context of national systems of entrepreneurship
Fig. 3 Interaction plots
The nonsignificant relationship between the regu-
lative dimension of NSEs and entrepreneurial inten-
tion was not anticipated in the hypotheses. To better
understand this finding, we conducted additional
robustness checks (not reported in the tables) and
found that there is a significant negative curvilinear
association for the direct effect, which is not observed
for the other dimensions. This suggests that there is an
optimal level of strength in the regulative dimension,
above and below which individuals seem to be
deterred from forming entrepreneurial intentions. This
finding may reflect some of the observations in the
literature (e.g., Smallbone and Welter 2012; Aidis
et al. 2008; Estrin et al. 2013) where it is shown that
weak or deficient regulations or weak enforcement
could encourage entrepreneurship and high or com-
plex regulatory burdens discourages entrepreneurship.
The interaction effect with entrepreneurial readi-
ness is the focal effect of this paper. The positive
direction suggests that where the regulatory system is
stronger, individuals with high entrepreneurial readi-
ness show stronger increases in entrepreneurial inten-
tion than individuals with low entrepreneurial
readiness. This finding shows that the relationships
between individual and country-level dimensions of
NSEs are important, and they may explain differences
in the quality of entrepreneurship between countries—
for instance if individuals with higher entrepreneurial
readiness form more successful companies. This
finding also suggests that even if the direct effect of
the regulative dimension seems to be curvilinear, the
differentiating effect with regard to which individuals
form entrepreneurial intention is consistent across the
entire spectrum of regulative arrangements.
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 Author's personal copy
The normative dimension has a positive relation-
ship with entrepreneurial intent, suggesting that as
countries strengthen their normative entrepreneurial
environment, more individuals become interested in
entrepreneurial endeavors. Although this finding sug-
gests that policy interventions to increase the status,
and social and financial attractiveness of entrepreneur-
ship have the potential to increase the entrepreneurial
intent of individuals, our results with regard to the
interaction effect suggest that such policy tools should
be used with caution. The negative interaction effect
means that the increase in entrepreneurial intention is
highest among those individuals who are least ready to
engage in entrepreneurship. This suggests that indi-
viduals seem to be attracted to entrepreneurship
because of the status it confers rather than to leverage
their personal skills, networks, and experience to
create a new successful business.
The cognitive dimension has a negative and
significant direct effect, suggesting that where cogni-
tive systems expose individuals to entrepreneurship to
a higher degree, individuals may be less inclined to
consider entrepreneurship as an option for them.
While this finding is counterintuitive, the interaction
effect may provide some insights as to potential
explanations. It shows that stronger cognitive dimen-
sions within national systems of entrepreneurship are
associated with increased entrepreneurial intention
among individuals with high entrepreneurial readi-
ness. In this sense, it is possible that greater cognitive
arrangements provide individuals with a better foun-
dation to assess their own entrepreneurial readiness,
and countries with strong cognitive arrangements may
see higher-quality entrepreneurship.
Finally, the significant and negative effect of the
conducive dimension suggests that countries with
stronger technological and innovation systems for
entrepreneurial activities will see lower entrepreneur-
ship rates. This finding is consistent with similar
observations made with respect to innovation-based
entrepreneurship (Stenholm et al. 2013; Anokhin and
Wincent 2012). Based on the item definitions, it would
also seem plausible that if existing institutions are
more conducive to innovation, individuals may com-
mercialize innovations through those institutions and
existing companies, rather than engaging in
entrepreneurship to implement their innovations.
Again, our analysis of the interaction effects with
entrepreneurial readiness provides additional insights:
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R. S. Schillo et al.
The positive interaction effect suggests that more
conducive systems will see higher entrepreneurial
intention among individuals who display higher
entrepreneurial readiness, even though overall, fewer
individuals have entrepreneurial intention. Presum-
ably, this outcome may be productive and efficient, as
start-ups are associated with high risk and they require
considerable resources in terms of building an orga-
nization and accessing markets.
From a theoretical perspective, our work comple-
ments previous research employing institutional the-
ory to gain a deeper understanding of cross-national
differences (De Clercq et al. 2013; Estrin et al. 2013;
Aidis et al. 2008) in the rates and types of
entrepreneurial activities undertaken (Stenholm et al.
2013). Our study confirms that institutional theory
provides a solid basis for understanding cross-national
differences in entrepreneurship (Acs et al. 2014;
Audretsch et al. 2006) and works effectively when
combined with individual-level variables in multi-
level statistical approaches.
At the individual level, previous research distin-
guished different types of entrepreneurship, e.g.,
productive and unproductive entrepreneurship (Bau-
mol 1990) and necessity and opportunity
entrepreneurship (Reynolds et al. 2002). The concept
of entrepreneurial readiness is distinct from these
concepts, in particular as it can be assessed at the
initial stages of entrepreneurial contemplation, rather
than on the basis of entrepreneurial entry or outcomes.
However, it seems plausible to expect that these
concepts may be complementary, in that individuals
with lower entrepreneurial readiness may be more
likely to consider entrepreneurship from a necessity
perspective, and that their new ventures may be less
productive or successful. This may be a useful avenue
for future research.
Furthermore, the previous research on unproduc-
tive or destructive entrepreneurship and necessity or
opportunity-based entrepreneurship was found to be
related to economic settings, e.g., in terms of transition
economies, innovation-based economies, and corrup-
tion (Estrin et al. 2013; Aidis et al. 2008; Anokhin and
Schulze 2009; Tan et al. 2009; Anokhin and Wincent
2012). We tested for a direct relationship to our study
and included a dummy variable for innovation-based
countries as a robustness check (not reported in the
tables). This dummy was not significant, suggesting
that there is no obvious direct relationship with
 Author's personal copy
Entrepreneurial readiness in the context of national systems of entrepreneurship
different types of economies, although future research
should investigate this issue further.
From a practical perspective, the significant inter-
action between the individual and institutional level
implies that policy makers can design their NSE to
provide the right individuals (in the sense of Acs et al.
2014) with the right institutional support in order to
ensure the efficient allocation of entrepreneurial
resources. Our study shows that the effects of NSE
dimensions and their interactions with individual-
level entrepreneurial readiness combine to suggest
different courses of actions for governments intent on
increasing their overall entrepreneurship rate, as
compared to those more focused on encouraging
highly qualified individuals to engage in entrepreneur-
ship. For the regulatory, cognitive and conducive
dimensions, governments risk stifling entrepreneurial
intent with strong national frameworks, but at the
same time, such measures may serve as a filter to
achieve higher rates of qualified entrepreneurship.
With regard to the normative dimension, the effect is
opposite. Governments can encourage higher level of
entrepreneurial intention, but this could encourage
individuals with low entrepreneurial readiness to
engage in new venture creation, which could divert
resources away from more qualified and ready
individuals.
Finally, in light of the emerging nature of this issue
and the lack of data specifically available to measure
key elements of NSE, there are some obvious limita-
tions with such studies and ours is no exception. To
begin, data sources are relatively limited, especially
when attempting to conduct cross-country compar-
isons. This study relied on existing data from a range
of international institutions and research groups,
which are among the most reliable data sources
available at this time. However, they still cover only
a limited number of indicators, they are not available
for all countries for all years, and in some cases there
may be differences in measurement across countries.
Secondly, researchers approaching entrepreneurship
from an economics or management perspective typ-
ically focus on regression-based analyses to conduct
their studies. Such methods tend to not reflect systemic
dynamics very well, for example in that they distin-
guish between independent and dependent variables, a
concept not well suited for systems thinking. How-
ever, more systems-based methodologies, for example
simulations and agent-based modeling, have not yet
been researched extensively in the economics and
management contexts, so this study attempted to
reflect the complexity of interactions and system-level
differences between countries as well as possible
within regression frameworks. Finally, research using
methodologies such as multi-level modeling with
relatively large data sets require more computational
resources than simple regression model, which may be
one reason current implementation of such models
tend to be limited to simple models.
7 Concluding remarks
This study complements and extends the limited
extant multilevel literature, which examines the
impact of regulatory factors on growth aspirations
(Autio and Acs 2010), property rights, corruption, and
greater government activity on growth aspirations
(Estrin et al. 2013), impact of the financial and
educational systems, trust and cultural values on new
business activity (De Clercq et al. 2013), influence of
regulative, cultural-cognitive, and normative institu-
tional dimensions entrepreneurial activities (Urbano
and Alvarez 2014), and gender, capital, and macro-
level conditions on entrepreneurship (Elam 2008;
Elam and Terjesen 2010; Terjesen and Szerb 2008).
Moreover, by utilizing a cross-country multilevel
research design to examine how the relationship
between entrepreneurial readiness and entrepreneurial
intention is moderated by institutional factors, our
study contributes to filling the need for more multi-
level studies on entrepreneurship (Busenitz et al. 2000;
Schendel and Hitt 2007). Also, by looking at the
interaction of entrepreneurial readiness with the four
institutional dimensions, our study responds to recent
calls for more multilevel studies that analyze the
interactions between individual- and country-level
institutional considerations (Stenholm et al. 2013; De
Clercq et al. 2013).
Our study proposes an improved measure of
entrepreneurial readiness, which combines various
individual attributes into a single measure as opposed
to multiple individual measures used in the current
literature. Multiple individual measures often tend to
produce mixed results because the mix of individual
measures across studies tends to differ and are rarely
comparable. The proposed single measure adds con-
siderable parsimony, which can produce consistent
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results especially in future multilevel studies where
country-level samples tend to be small.
Future research can build on the entrepreneurial
readiness concept to determine how it relates to
opportunity and necessity entrepreneurship and pro-
ductive and unproductive entrepreneurship in various
country contexts, for example focusing on countries at
varying stages of development. In addition, it would
be useful to extend this research beyond the intention
stage in the entrepreneurial process, and determine
whether entrepreneurial readiness can be associated
with different types of entrepreneurial activities and
outcomes. Further investigation of the interactions
with other NSE dimensions or pillars (Acs et al. 2014)
would also allow to gain more nuanced understanding
of country differences, allowing policy developers to
develop policies that account for the unique charac-
teristics of the institutions and individuals in their
jurisdictions.
Compliance with ethical standard
Conflict of interest The authors declare that they have no
conflicts of interest.
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