The effect of Total Early-Stage Entrepreneurial Activity on Eudaimonic Well-Being1

Abstract

Panel data, consisting of data on 105 countries from 2005 till 2017, has been deployed to assess the effect of total early-stage entrepreneurial activity (TEA) and opportunity driven entrepreneurship on national levels of eudaimonic well-being (EWB). Additionally, moderation analyses were performed to determine whether corruption influences these relationships. Pooled OLS, fixed effects, random effects regression were used to test the hypotheses, plus some additional statistical procedures where necessary. Robust evidence was found in favour of an effect of TEA on EWB in the form of an inverted U-shape, with the maximum of EWB occurring at a TEA of 22,39%. No significant evidence was found supporting an effect of opportunity driven entrepreneurship on eudaimonic well-being, confirming findings from previous research. To explain these results self-determination, social comparison, and social contagion theory are utilised, hence, the economic questions were assessed through a psychological lens. Additionally, corruption did not moderate either of the relationships. Stimulating entrepreneurship levels within society has been found to increase GDP growth, however, there seems to be a limit to which stimulating entrepreneurship positively affects eudaimonic well-being. The contribution of the current research is providing a clearer picture regarding the effect of entrepreneurship on national well-being. The effect of TEA on national levels of EWB had, to the knowledge of the author, not been studied before.