Aim:

This workshop brings together the Global Entrepreneurship Monitor (GEM) team with scientists of the European Commission’s Competence Centre on Composite Indicators and Scoreboards (COIN) with a view to discuss together how to further improve the Global Entrepreneurship Monitor and to ensure that it is developed using the highest standards in composite indicator methodology.

Description:

Entrepreneurship is a multifaceted phenomenon that takes many forms such as business creation and innovative activities within a company. A synthetic measure of entrepreneurship that captures the different forms of entrepreneurship is needed for cross-country comparisons. This paper proposes a formative Structural Equation Model (SEM) to construct a synthetic indicator that summarizes the four entrepreneurship indicators of the Global Entrepreneurship Monitor (GEM) using 2017 data on 54 GEM countries. Compared with traditional GEM measures such as Total Entrepreneurship Activity, the proposed composite index offers a more comprehensive view of country entrepreneurship activity and it is able to captures cross-country variation in GDP growth more effectively than traditional measures (TEA).  A sensitivity analysis illustrate uncertainty about the estimates. Main results are robust to lagged measures of entrepreneurship, non-linear relationship and different development stages of development

Societal impact:

Entrepreneurship is an important source of economic growth. Entrepreneurship is a multifaceted phenomenon  and a comprehensive measurement is needed to monitor and assess policies supporting entrepreneurship. The composite indicator index can be used to rank countries aiming to capture attention of media, policy-makers, and scholars.