Culture and Entrepreneurial Potential: a Nine Country Study of Locus of Control and Innovativeness

EXECUTIVE SUMMARY Entrepreneurship research has identified a number of personal characteristics believed to be instrumental in motivating entrepreneurial behavior. Two frequently cited personal traits associated with entrepreneurial potential are internal locus of control and innovativeness. Internal locus of control has been one of the most studied psychological traits in entrepreneurship research, while innovative activity is explicit in Schumpeter’s description of the entrepreneur. Entrepreneurial traits have been studied extensively in the United States. However, crosscultural studies and studies in non-U.S. contexts are rare and in most cases limited to comparisons between one or two countries or cultures. Thus the question is raised: do entrepreneurial traits vary systematically across cultures and if so, why? Culture, as the underlying system of values peculiar to a specific group or society, shapes the development of certain personality traits and motivates individuals in a society to engage in behaviors that may not be evident in other societies. Hofstede’s (1980) extensive culture study, leading to the development of four culture dimensions, provide a clear articulation of differences between countries in values, beliefs,