The Effect of Family Support on Entrepreneurship

Abstract

In this paper we analyze the effects of start-ups (new firms) that have discontinued their business The Global Entrepreneurship Monitor (GEM) definition of new firm is “the firm has made payments of any salaries and wages for more than three months to employees including owners” We hypothesize that the duration of a new firm is associated with family support There are two types of instrumental support from a family: financial and social capital as mentioned by Edelman (2016) In parallel we estimate that differ economic development level and necessity driven bring difference to an entrepreneur’s activities; furthermore different cultures lead to a difference in collective consciousness which will indirectly have influence on an entrepreneur’s activities To test our hypotheses we studied the Total Early-Stage Entrepreneurial Activity (TEA) of 93 countries drawing from 2012 to 2015 GEM data a survey of entrepreneurship activities from worldwide countries and we tested on new firms that were in the process of starting new business The results reveal that financial support from family and Eastern country is negative and significantly associated with new firms that have discontinued their business which means those factors help new firms maintain their business longer We further argue that the effect is enhanced by Eastern country which was estimated in high in-group collectivism and is strongly performed in family groups (social support in the form of family cohesiveness) in Eastern country; therefore the result shows the interaction of Eastern country and financial support from family further negatively effects on new firms that have discontinued their business which means they maintain business longer

Date of Award	2019
Original language	English
Supervisor	Wei-Shiun Chang (Supervisor)