Relationship between Uncertainty Avoidance Culture, Entrepreneurial Activity and Economic Development

3.
 
Methodology 
3.1.
 
Research Goal 
The purpose of our research is to measure relationship between uncertainty avoidance, entrepreneurship and 
economic development. Three sources of data are use
d for this study: the countries’ TEA scores originate in the GEM 
project; the countries’ development levels and GDPPC originate in the World Bank; the countries’ uncertainty 
avoidance levels obtained from Hofstede. Data were analyzed by the SPSS statistical packet program and expected 
relations will be tested through correlation and regression analyses.
Hypothesis 1 (H1)
: The country’s economic development level (GDPPC) influences the relationship between the 
entrepreneurial activity rate (TEA) and the uncertainty avoidance culture. 
 
Hypothesis 2 (H2): TEA rate is negatively connected to high uncertainty avoidance in relatively poor countries. 
 
Hypothesis 3 (H3): TEA rate is negatively connected to low uncertainty avoidance in relatively rich countries. 
3.2.
 
Sample and Variables 
TEA score taken 
from the Global entrepreneurship monitor (GEM), the countries’ uncertainty avoidance scores 
taken from Hofstede (2001), economic development levels and GDPPC taken from the World Bank are used in this 
study.
Global Entrepreneurship Monitor: 
GEM’s
first report which encompassed 10 members of OECD countries was 
published in 1999. In 2013 report, GEM’s
countries’ number
reached to 100. TEA is defined as 
“
the percentage of 
individuals aged 18
–
64 in an economy who are in the process of starting or a real ready running new 
businesses” in 
the GEM Project. 
Uncertainty Avoidance: 
Hofstede’s
cultural dimensions were scored 0 and 100. Countries with higher scores 
indicate risk aversion cultures, while lower scores indicate risk taking cultures. Hofstede sorts the higher uncertainty 
avoidance countries (Japan, El Salvador, Portugal, Belgium, Greece, Guatemala, Uruguay, Poland), and the lower 
Entrepreneurship (Multidimensional) 
Conditions (Personal, Cultural, Institutional) 
Intermediate linkages (Entrepreneurial efforts, Innovation, Variety, Competition, etc) 
Economic Growth 

---

912

 Yasemin Hancıo
ğ
lu et al. / Procedia - Social and Behavioral Sciences 150 ( 2014 ) 908 – 916 
uncertainty avoidance countries (Denmark, China, Singapore, Ireland, Jamaica, Sweden, Hong Kong, United 
Kingdom). 
Gross domestic product per capita at the country level:
57 countries’ GDPPC values
come from the World Bank.
3.3. Analyses and Results 
We started analyzing with all 57 countries but the results were not significant (p=0.015). Then, we divided these 
countries into 3 with respect to their income levels: High income, upper middle income, lower middle- low income. 
But again the results were not significant.
Finally, 
two 
subsamples have been created with inclusion criteria of 
GDPPC and population. First, subsample consists of GDPPC over $20,000 and a population of fewer than 
30 million in order to further explore the relationship between UAI and the TEA of them or developed 
nations. This subsample includes the sixteen more developed and smaller (i.e. population) nations of the 
overall sample (i.e., United Arab Emirates, Switzerland, Sweden,Singapore, Portugal, Norway, 
Netherlands, Israel, Ireland, Hong Kong, Greece, Finland, Denmark, Belgium, Austria, Australia). Second 
subsample consists of GDPPC over $20,000 USD and a population of over30 million. This subsample 
includes only the most developed and larger nations and consists of eight countries (i.e. United States of 
America, France, Spain, Italy, Japan, Germany, South Korea, United Kingdom). 
Table 1.Correlation Matrix