Macro-Level Determinants of Entrepreneurship and Endogeneity Bias – A Methodological Contribution

The eclectic theory of entrepreneurship has identified several macro-determinants national entrepreneurial activities. Taking advantage the availability new databases, recent empirical studies have sought to test these determinants in multicountry using multivariate regression models. Due lack consensus around their results, this paper posits that literature may be subject endogeneity bias, which seriously threatens its accuracy, consistency, and reliability, as well effectiveness resulting management policy recommendations. Consequently, we methodologically demonstrate why how occurs by analyzing theoretical We also provide a step-by-step guide help researchers understand detect correct IV techniques applied panel data analysis early-stage sample 48 countries between 2000 2019. A ‘toolkit’ generic STATA software commands specifying tests, methods, assumptions performed is included. In doing so, aim raise awareness bias among empirically future order avoid hazards. Finally, after correcting for endogeneity, our identifies protection property rights, culture, income, economic development most consistent entrepreneurship, providing important business insights.