Entrepreneurial environment attractiveness: a cross-country longitudinal cluster analysis

The purpose of this work is to explore what determines a country’s entrepreneurial environment attractiveness, by understanding how countries compare regarding their business environment and entrepreneurial opportunities and whether such aspects have changed over time.

Through a longitudinal country-level cluster analysis of business environments (years 2001 and 2016), this study captures changes in classification of both emerging and developed market economies throughout an attractiveness spectrum, from least to most attractive environments.

Interesting findings involve the difference in trajectories of emerging economies, such as India compared to the stagnation of Brazil, Argentina and South Korea in the 15-year period. The paper seeks to contribute to the debate on the attractiveness of the entrepreneurial environment beyond the simple notion of most and least economically developed countries by providing a framework for dynamic cross-country analysis of entrepreneurial environmental attractiveness that can be further explored, tested and expanded.

Main limitations relate to the non-exhaustive sample of countries and variables. Contributions are both academic and managerial: helping to fill important research gaps in international entrepreneurship, namely, environmental conditions, cross-country comparisons (Coombs et al., 2009) and the understanding of elements of the investment climate (Stern, 2002); and assisting managers, entrepreneurs and policymakers understand what defines a country’s entrepreneurial environment attractiveness to better evaluate potential locations for investment.

The originality of the paper lies in using cluster analysis in a longitudinal study of country attractiveness, as well as in advancing the debate of country attractiveness, by adding a temporal dimension (from factors that are less structural to more conjunctural) and a comparative dimension in a new cross-country comparison framework of analysis.