Social and human capital as determining factors of entrepreneurship in the Spanish Regions

Entrepreneurship, innovation and creativity are considered key factors of the economic growth because they usually bring on behaviors aligned with the market development, productivity and social cohesion. This study aims to analyze the factors that influence the entrepreneurial role, and provide a better understanding of this behavior from a dynamic perspective, in order to support policies for encouraging entrepreneurship. To do this we used the data presented in the report of the Global Entrepreneurship Monitor (GEM), in its 2011 edition, which is based on an empirical analysis of a sample of 27,000 Spanish citizens. The results confirm that the perception of market opportunities, and having the skills and knowledge required to create new companies are explanatory factors of the entrepreneurial activity. However, it is also possible to assert that the increase of the entrepreneurial activity rate motivated by the need of self-employment of the entrepreneur influences the increase of fear of failure, and this could generate a dynamic harmful to the business creation in the medium term. Our model aims to support the decisions of public institutions about the incentive measures for entrepreneurs. This work contributes to the study of entrepreneurship and business creation from a multidisciplinary perspective, incorporating psychological, sociological and economic approaches from a dynamic perspective. It also allows an in-depth analysis of factors undetected with other methodologies. We examined the determining factors of entrepreneurship by estimating a logit model based on entrepreneur’s social capital (networking) and the geographical location (region) of the business activity. This analysis has shown significant differences of these factors according to the stage of the entrepreneurial process. These results have let discuss the implications for the entrepreneurial dynamic, in order to support new policies in favor of entrepreneurship. JEL Classification: L26.