How does income level, cultural values, and government support influence entrepreneurship: an integrated framework

The re-engineering of the global economy has generated extensive research into economic growth engines, with entrepreneurship emerging as a key driver. Despite numerous studies, identifying the variables that bolster entrepreneurship remains challenging due to interconnected factors. To fill this gap, this study adopts an integrated model to examine three factors influencing entrepreneurship and its motivation: income level, cultural, and political variables.

Utilizing the Maslow theory of need and robust second-generation econometrics approaches, the study analyzed data from 1990 to 2021 across 15 selected countries. The findings demonstrate that the variables are first difference stationary and exhibit long-term co-integration. Therefore, the pooled mean group regression estimator is used to explore the long-term relationships among the study variables.

The results show that income levels positively and significantly impact entrepreneurship, but at a decreasing rate in high-income regimes, and positively influence cultural values. Cultural values of mastery and autonomy significantly foster entrepreneurship. Government support further reinforces the connection between cultural values of mastery and entrepreneurship.

It is recommended that programs be developed to nurture an entrepreneurial mindset and provide resources to individuals who demonstrate these values, thus enhancing entrepreneurial activity.

The study exposed the heterogeneous impact of income level on entrepreneurship and proposed an integrated model to explore entrepreneurship in emerging countries as prior research often examined these variables in isolation, which has proven insufficient in explaining the discrepancies in entrepreneurial activities among countries.