5. Research Hypothesis
In this study, the following research hypothesis was presented through the previous research analysis. According to the result of OECD (2012), it analyzed the result that the administrative procedure when establishing a company and monetary burden can weaken entrepreneurship [
43]. For example, if the minimized capital needed to establish a company is huge, the documental work is complex, and its procedure time is long, entrepreneurship can be shrunk. Thus, the policies to simplify administrative procedures for business efficiency improvement can have an impact on the increase of entrepreneurship. According to a study by Lee et al. (2012) [
49], the regulations in the process when a company is established and grows also has an impact on start-up business. That is, if the procedure is complex and requires a long time to obtain permission for expansion and foundation of a production facility and warehouse, entrepreneurship may be shrunk. Government funding for startups is only temporary. Therefore, government support policies should be established to supplement the social system [
50]. Therefore, this study suggests Research Hypothesis 1 as below.
Research Hypothesis 1 (H1). Governmental policies have positive influence on social system and environment.
Governments offer various policy supports to promote entrepreneurial activities. That is, the policies for entrepreneurship are not only simply for the improvement of the business environment, but also for the purpose of making the business social structure to ease business start-ups and entrepreneur culture. Government should endeavor to create enabling environments conducive to the division of labor and the commercialization of invention and exchange, as too much public involvement, without co-interest from the private sector, can hinder rather than help entrepreneurs by creating possible market distortions [
51]. Acs et al. (2007) [
52] studied policies for the economy of a company. They studied how different factors impact the economics of a company, including policies relating to the global economy, taking entrepreneurship into account in setting national policies, regional policies to promote entrepreneurship, and lastly policies that primarily affect an individual entrepreneur. In addition, they studied entrepreneurship and entrepreneurial activities in the unit of a country or region, and they divided influential factor on entrepreneurship into five factors [
53]. In addition, they argued that government policies can influence entrepreneurship by comparing and analyzing the entrepreneurship’s establishment and assessment and the results in each country [
53]. Governmental regulations and flexibility in a labor market are also important factors to those who prepare a business start-up or run companies. Djankov et al. (2002) [
54] investigated, compared, and analyzed various regulations and factors in relation to the procedure for establishment of companies, targeting 85 countries. In addition, regulations in relation to a labor market in the past were mainly regarded as primary factors that impact the rate of employment at the state level, which was not considered as a factor that influences entrepreneurial activities. However, relevant studies have recently increased. Kanniainen and Vesala (2005) [
55] analyzed the impact on start-up companies of the regulations in a labor market in an empirical way; they suggested that regulations have negatively suppressed business start-ups. It is also indicative that more dynamic union activities and bigger compensation scales for employees are correlated with the decreasing rate of business start-ups. The policy for immigration is also a main factor to enhance entrepreneurship. Existing various studies on entrepreneurship show that, similar to the influx of foreign labor to Silicon Valley in the USA, ethnic variety can lead to increases of business start-ups through creative innovation [
56,
57,
58]. Therefore, this study suggests Research Hypothesis 2 as below.
Research Hypothesis 2 (H2). Governmental policies have positive influence on entrepreneurship.
Acs and Szerb (2007) studied financial support for the increase of entrepreneurial activities [
52]. They divided these policies into four fields: policies relating to the global economy, taking entrepreneurship into account in setting national policies, regional policies to promote entrepreneurship, and policies that primarily affect entrepreneurs. Government policies involve such activities as the provision of finance for entrepreneurship, and advice and financial assistance for the firm [
59]. In addition, Lerner (2010) studied the appropriate role for public policy in the promotion of venture capital and high-potential entrepreneurship [
60]. Financial and investment policies play an increasingly important role in entrepreneurial, venture and economic development [
61,
62,
63]. Thus, this study suggests Research Hypothesis 3 as below.
Research Hypothesis 3 (H3). Governmental support policies for business start-ups impact the financing support system for business start-ups.
Previous studies on business system and environment emphasize the importance of finance (funding) for business start-ups and growth and survival of entrepreneurial activities. Holtz-Eakin, Joulfaian, and Rosen (1994) judged that the scale of personal inheritance is a measuring element to easily acquire capital, through which they explored the correlation between entrepreneurial survival and results [
64]. They found that, if an entrepreneur receives a large inheritance, they can maintain a company much longer, and have better results in the case that their company survives. Van Auken (1999) insisted that the degree of capital use is the most important obstacle that potential company owners face [
65]. Moreover, many researchers suggested that the main factor that influences business system is financing. Holtz-Eakin et al. (1994) [
64] found that the survival and results of start-up businesses environment are deeply related to financial liquidity, and Bates (1995) [
66] argued that the limit of financing determines the entry of self-employed. OECD (Organization for Economic Cooperation and Development) (2013) shows that financing has an impact on social finance system according to how easily companies can obtain a loan from a bank, how high a lending interest rate they can obtain, and how much extra interest exists for overdue payments [
67]. It is also explored how active a venture capital market is, what extent is the tendency to invest in startup businesses, and how active the issue of stock and bond and a circulation market are, which is proven to have impact on entrepreneurship. Thus, this study suggests Research Hypothesis 4 as below.
Research Hypothesis 4 (H4). The financing support system influences the social system and environment.
Today, countries, companies, and institutions all over the world investigate social-systematical supports such as entrepreneurship, and its education is an important factor. For these reasons, research and education on entrepreneurship have been widespread [
67]. In addition to this, since entrepreneurship is not “the status of existence” but “the status of becoming completed” [
68], preceding studies show entrepreneurship through the process that is started from the perception for opportunities by entrepreneurs to practical start-up business with formation of the intention to launch a start-up business. However, even if people have the will to launch a start-up business, they would fail if there are no clear objectives and the right knowledge about starting a business. Thus, to create a successful start-up business, strengthening entrepreneurship and acquiring capabilities that are required for creating a start-up business are important. Turker and Selcuk (2009) explored the environmental factors that impact the formation for university students’ intentions to create a business start-up [
69]. These include educational resources, improvement of structure, relational support, and so on. In addition, according to Greenberger and Sexton (1988) [
70], the development of a successful new business is achieved by entrepreneur’s characteristics and their interaction with surrounding environmental factors. Besides, education is one of the most important and sustainable fields in which people have invested much attention. Thus, people, through education, not only acquire the knowledge they need and develop abilities, but they also gain opportunities to improve their quality of life [
71]. In addition, West and Hore (1989) suggested that education influences three parts of personal development including changes of attitudes and values to students, the changes of ability, and potential social effects [
72]. Van der Kuip and Verheul (2004) insisted that, although both entrepreneurship and educational systems for economic development are important, the education for entrepreneurship is more important from a social point of view [
73]. In relation to this, Wang and Wong (2004) pointed out that the reason many university students cannot achieve their dream of creating a successful business start-up is that their preparation is insufficient [
74]. In addition, Hatten et al. (1995) argued that the educational opportunities for business start-ups influence personal attitudes and behaviors on entrepreneurship [
68]. Therefore, it is suggested that professionals and practical education systems can offer positive influence on entrepreneurship. Entrepreneurs are not born with many capabilities necessary for entrepreneurship by nature, but rather there are more cases that entrepreneurs acquire those by nurture [
42]. Thus, education is needed to improve entrepreneur’s capabilities and to reinforce their intention for creating a business start-up, of which knowledge or skill in relation to business start-up spur individuals’ motivation for it. Besides, education enables individuals not only to strengthen their management ability but also to increase entrepreneurship [
42], and this is suggested as an important factor for the right formation of intention for creating a business start-up and fulfillment of successful activities. In addition, the possibility to easily recruit professional foreign labor with expertise can be an influential factor on entrepreneurship. Level of education is also analyzed as a factor that influences entrepreneurship. Many preceding studies show that those who are better educated can have more business opportunities [
56,
57,
75]. It shows that higher levels of education correspond to higher entrepreneurship and entrepreneurial activities [
55,
56,
76,
77]. In particular, Kim et al. (2012) found that the influence of educational level is much higher in the area with higher GDP than in the area with lower GDP [
78]. In addition, Wennekers and Thurik (1999) explained that culture and social system are influential factors on entrepreneurship from a broader view [
79]. The OECD (2012) divides the influential factor on national entrepreneurship into regulations, financial environment, knowledge infrastructure, the development of abilities, and culture [
43]. In addition, it also influences how much entrepreneurship is spread throughout society, whether social perception to see business start-up is positive, and whether social system and social atmosphere to help people overcome the fear of failure for business start-up is created. In addition, based on the research that R&D cooperation has a positive impact on entrepreneurial activities, the activities in the dimension of government, companies, and R&D in universities and the system for the vitalization of collaborative research between companies and universities are required for the creation and diffusion of knowledge. According to OECD (2013), research results should be eligibly protected by patents and so on [
67]. It has been found that whether the system in which the technology developed by companies, universities, or research institutes is easily transferred and commercialized has an impact on entrepreneurship. Besides, Choi and Phan (2006) studied that union activities have negative impacts on the rate of business start-ups [
80]. Thus, this study suggests Research Hypothesis 5 as below.
Research Hypothesis 5 (H5). Social system and environment have positive influence on entrepreneurship.
Based on the research hypotheses, the research model in
Figure 1 is presented.
8. Conclusions
8.1. Summary of Research Result and Its Implication
Governmental policies positively impact social system and the environment. Thus, the government should encourage the development of educational programs to help students understand creativity and basic market economic principles. These educational programs can help students to gain a mindset for creating start-up businesses and improve innovative thinking. Therefore, the government should encourage entrepreneurship education from the elementary to the basic level. This will be of great help in improving the fears and misconceptions of entrepreneurship. In addition, education that enhances creativity helps to cultivate entrepreneurship. To create a start-up environment to start a business, one only needs a good idea. In addition, it is necessary to open and run various business incubation courses for those who wish to start a business.
In addition, by institutionalizing companies’ fair entry competition to a market, the government should institutionally offer the support that defends that new ideas and businesses are encroached by companies with huge capital. In other words, it is necessary to create a social environment that can have fair competition and restrict monopolies through regulations. On the other hand, entrepreneurs should be enabled to develop long-term business plans through consistent government policies.
These active endeavors of the government will play an important role to change society into a good environment for running companies based on creative ideas. In addition, governmental policies have positively impacted funding to guarantee companies’ stable business activities. The government, through policy funds, not only effectively supports start-up businesses and growth companies, but it also offers opportunities for founders to receive funds from financing institutions at special interest rates by inducing low interest rates. Therefore, these governmental policies can positively influence financing, which helps new firms and growth companies to easily secure funds. After all, easily securing funds is linked to companies’ investment, and this makes a social environment in which anyone can plan and create new business. Thus, government policy efforts and the improvement of a market’s financing environment can construct the social infrastructure for commercializing ideas, which can then improve entrepreneurship.
However, was found that the government’s direct support for startups or its direct support activities does not help promote entrepreneurship. Therefore, the government should play a role in creating a business-friendly environment through institutional support to help startups withstand the investment-friendly environment and financial pressures. In addition, it is necessary to have a structured system to help troubled start-ups solve problems with the help of management experts. These systems can help foster a challenging entrepreneurial spirit, free from fear of business failure.
In addition, according to the results of this research, governmental policies cannot positively influence the opening of a market. It was found that a market’s open environment cannot offer a positive influence on the financing of companies’ growth. That is, instead of a policy to construct a market’s open environment, it was found that a policy that can directly influence companies’ financing is more helpful. Moreover, rather than having the government by itself attempt to improve entrepreneurship, it is more important to make a good environment for running companies and a social environment to encourage creativity and innovation. In addition, it is important to induce changes in the market environment by introducing policies such as reducing the lending standards for start-up companies and increasing opportunities for investment from venture capital. This is because it changes the market environment, which ultimately reduces the fear of entrepreneurship and helps motivation.
In other words, the difficulties of start-ups and the fear of failure will be reduced if the government’s institutional back-up and stable funding are made so that there is no difficulty in new business. Moreover, governmental policy support will be linked to the diffusion of education on creativity and a market economy, which can connect challenging entrepreneurship problems naturally to original ideas.
8.2. Limitations of the Study and Future Research
Ahmad and Hoffmann (2008) argued that the relationship between decision factors of entrepreneurship and entrepreneur’s outcomes is done by conjecture and not by statistically established relationships [
85]. That is, despite the need for studies on the various casual relationships between many variables suggested in the framework for analysis of entrepreneurship, few studies that have accomplished this task.
In particular, as a determinant of entrepreneurship, there is a lack of systematic research on reliability problems of various variables and the causal relationships among the topological constructs. Therefore, the implication of this study is greatly significant in that it systematically analyzed the influential factors on entrepreneurship by exploiting the analysis of preceding research and a statistically analytical technique. However, a limitation of this study is the number of expert surveys for statistical analysis. Thus, future research should secure more various samples for professional groups. In addition, there is the need to broaden this study to include general citizens, to analyze the difference between professional groups and general citizens, and to deduce its differences and implications. The research hypothesis was verified based on the survey in Korea. However, this can be presented as a limit to the generalization of research hypotheses. Because the government’s policies consider the social environment of each country, it is necessary to acquire data through global survey and to verify research hypotheses.