Youth Entrepreneurship in Germany: Empirical Evidence on the How, the Why, the How Many, the Who and the When
Abstract
:1. Youth Entrepreneurship: Relevance, Research Gaps and Opportunities for Academic Research
2. Literature Review: Theoretical Explanations for and Empirical Evidence of the Volume and the Micro-Level Factors of Youth Entrepreneurship
2.1. Youth Entrepreneurship—Definition, Evidence and Relevance
2.2. Factors in Youth Entrepreneurship
2.3. Youth Entrepreneurship in Germany—Conceptual Model and Hypotheses
2.3.1. Internal Factors
- Gender;
- Household income;
- Education;
- Business angel activity;
- Perception of own entrepreneurial skills;
- Fear of failure (as a reason NOT to start a business).
2.3.2. External or Contextual Factors
- Knowing other entrepreneurs who recently started a new business;
- Start-up opportunities in the region in which the respondent is living (own perception);
- Starting a new business as a desirable career choice (own perception of other people’s opinions);
- Level of status and respect for those successfully starting a new business (own perception of other people’s opinions).
3. Data and Methods
3.1. Data
3.2. Methods
4. Empirical Results
4.1. Descriptive Results
4.2. Regression Models
5. Discussion of Results
6. Implications for Policy and Further Research
Author Contributions
Funding
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
Abbreviations
ANOVA | Analysis Of Variance |
APS | Adult Populations Survey |
GEM | Global Entrepreneurship Monitor |
GVIF | Generalized Variance Inflation Factor |
ICC | Intraclass Correlation Coefficients |
OECD | The Organization for Economic Cooperation and Development |
ROSE | Random Over-Sampling Examples |
SMOTE | Synthetic Minority Oversampling Technique |
TEA | Total early-stage Entrepreneurial Activity |
UN | United Nations |
Appendix A
Gender | HHIncome | Education | Busangel | Skills | Fearoffailure | Goodopp | Career | Respect | |
---|---|---|---|---|---|---|---|---|---|
Gender | |||||||||
HHIncome | −0.09 *** | ||||||||
Education | 0.05 *** | 0.21 *** | |||||||
usangel | −0.06 *** | 0.09 *** | 0.04 *** | ||||||
Skills | −0.16 *** | 0.17 *** | 0.08 *** | 0.10 *** | |||||
Fearoffailure | 0.13 *** | −0.08 *** | −0.03 *** | −0.06 *** | −0.19 *** | ||||
Goodopp | −0.09 *** | 0.17 *** | 0.12 *** | 0.07 *** | 0.13 *** | −0.12 *** | |||
Career | −0.01 | −0.08 *** | −0.08 *** | −0.03 *** | −0.05 *** | −0.01 *** | 0.03 *** | ||
Respect | 0.04 *** | 0.04 *** | 0.05 *** | −0.02 *** | −0.08 *** | 0.06 *** | 0.07 *** | 0.17 *** | |
Knowent | −0.08 *** | 0.12 *** | 0.09 *** | 0.16 *** | 0.22 *** | −0.09 *** | 0.17 *** | −0.01 * | −0.03 *** |
Year | Model 1 | Model 2 | Model 3 | Model 4 | Model 5 | Model 6 | Model 7 |
---|---|---|---|---|---|---|---|
2010 | 0 | 15 *** | 73 *** | 5 ** | 13 *** | 12 *** | 61 *** |
2011 | 5 ** | 1 | 19 *** | 1 | 5 ** | 1 | 16 *** |
2012 | 3 | 2 | 6 ** | 1 | 3 * | 2 | 4 * |
2013 | 1 | 0 | 7 *** | 0 | 0 | 0 | 8 *** |
2014 | 1 | 0 | 0 | 8 *** | 5 ** | 0 | 2 |
2015 | 1 | 1 | 3 * | 1 | 2 | 0 | 2 |
2016 | 0 | 1 | 0 | 0 | 0 | 1 | 0 |
2017 | 2 | 0 | 5 ** | 0 | 1 | 0 | 5 ** |
2018 | 1 | 5 ** | 17 *** | 0 | 1 | 5 ** | 17 *** |
Model Number | ICC |
---|---|
1 | 0 |
2 | 0.003 |
3 | 0.028 |
4 | 0.011 |
5 | 0.045 |
6 | 0.002 |
7 | 0.027 |
Variable | Model 2 | Model 3 | Model 4 | Model 5 | Model 6 | Model 7 |
---|---|---|---|---|---|---|
Businessangel | 1.01 | 1.016 | 1.015 | 1.025 | 1.009 | 1.015 |
Education | 1.019 | 1.022 | 1.011 | 1.017 | 1.02 | 1.022 |
Fearoffailure | 1.012 | 1.019 | 1.009 | 1.013 | 1.013 | 1.022 |
Gender | 3.756 | 3.59 | 1.02 | 1.022 | 1.018 | 1.022 |
HHIncome | 1.02 | 1.024 | 1.011 | 1.016 | 1.017 | 1.023 |
Skills | 1.033 | 1.049 | 1.009 | 1.025 | 1.02 | 1.031 |
Career | 1.029 | 1.013 | 1.024 | |||
Goodopp | 1.027 | 1.013 | 1.03 | |||
Knowent | 1.03 | 1.032 | 1.031 | |||
Respect | 1.026 | 1.018 | 1.027 | |||
youngornotyoung | 1.186 | 1.195 | ||||
youngornotyoung # Gender | 3.837 | 3.671 | ||||
R2 Threshold | 1.145 | 1.215 | 1.205 | 1.251 | 1.14 | 1.212 |
Variable | Model 2 | Model 3 | Model 4 | Model 5 | Model 6 | Model 7 |
---|---|---|---|---|---|---|
Businessangel | 1.02 | 1.03 | 1.03 | 1.05 | 1.02 | 1.03 |
Education | 1.04 | 1.04 | 1.02 | 1.03 | 1.04 | 1.05 |
Fearoffailure | 1.02 | 1.04 | 1.02 | 1.03 | 1.03 | 1.04 |
Gender | 14.11 | 12.89 | 1.04 | 1.04 | 1.04 | 1.04 |
HHIncome | 1.08 | 1.1 | 1.05 | 1.07 | 1.07 | 1.09 |
Skills | 1.07 | 1.1 | 1.02 | 1.05 | 1.04 | 1.06 |
Career | 1.06 | 1.03 | 1.05 | |||
Goodopp | 1.06 | 1.03 | 1.06 | |||
Knowent | 1.06 | 1.06 | 1.06 | |||
Respect | 1.05 | 1.04 | 1.05 | |||
youngornotyoung | 1.41 | 1.43 | ||||
youngornotyoung # Gender | 14.72 | 13.48 |
Model | Measure | Mean | SD |
---|---|---|---|
Model 1 | AUC | 0.5107 | 0.0059 |
Model 1 | K-Fold Cross Validation (SMOTE) | 0.1554 | 0.0045 |
Model 1 | K-Fold Cross Validation (ROSE) | 0.1711 | 0.1109 |
Model 2 | AUC | 0.7698 | 0.0096 |
Model 2 | K-Fold Cross Validation (SMOTE) | 0.6724 | 0.0088 |
Model 2 | K-Fold Cross Validation (ROSE) | 0.6707 | 0.0083 |
Model 3 | AUC | 0.8109 | 0.0103 |
Model 3 | K-Fold Cross Validation (SMOTE) | 0.7236 | 0.0099 |
Model 3 | K-Fold Cross Validation (ROSE) | 0.7198 | 0.0096 |
Model 4 | AUC | 0.7988 | 0.0358 |
Model 4 | K-Fold Cross Validation (SMOTE) | 0.7968 | 0.0343 |
Model 4 | K-Fold Cross Validation (ROSE) | 0.7854 | 0.0336 |
Model 5 | AUC | 0.8094 | 0.0334 |
Model 5 | K-Fold Cross Validation (SMOTE) | 0.7585 | 0.0254 |
Model 5 | K-Fold Cross Validation (ROSE) | 0.752 | 0.0275 |
Model 6 | AUC | 0.7662 | 0.009 |
Model 6 | K-Fold Cross Validation (SMOTE) | 0.6591 | 0.0085 |
Model 6 | K-Fold Cross Validation (ROSE) | 0.659 | 0.0107 |
Model 7 | AUC | 0.8104 | 0.0101 |
Model 7 | K-Fold Cross Validation (SMOTE) | 0.7247 | 0.0113 |
Model 7 | K-Fold Cross Validation (ROSE) | 0.7172 | 0.0105 |
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Variable Name | Variable Definition | Values |
---|---|---|
Dependent | ||
TEA | Total Early stage Entrepreneurship: respondent involved in a nascent firm or young firm or both | 1: yes, 0: no |
Independent: person-related | ||
Businessangel | Respondent has, in the past three years, personally provided funds for a new business started by someone else, excluding any purchases of stocks or mutual funds | 1: yes, 0: no |
Education | Respondent’s highest educational attainment | 1: secondary degree and more 0: below secondary degree |
Fearoffailure | Fear of failure would prevent the respondent to start a business | 1: yes, 0: no |
Gender | Respondent gender | 1: female, 0: male |
HHIncome | Household income (recoded into thirds) | 68,100: highest 33% tile 3467: middle 33% tile 33: lowest 33% tile |
Skills | Respondent thinks to have the required knowledge/skills to start a business | 1: yes, 0: no |
youngornotyoung | Respondent’s age category | 1: 25–64, 0: 18–24 |
Independent: context-related | ||
Goodopp | Respondent sees good opportunities for starting a business in the next 6 months in the area where he/she lives | 1: yes, 0: no |
Career | In Germany, starting a business is considered a good career choice | 1: yes, 0: no |
Respect | In Germany, people growing a successful new business receive high status | 1: yes, 0: no |
Knowent | Respondent knows a person who started a business in the past 2 years | 1: yes, 0: no |
Model Number | Included Independent Variables | Included Data |
---|---|---|
1 | Youngornotyoung | All |
2 | Person-related variables + youngornotyoung | All |
3 | Person-related variables + context-related variables + youngornotyoung | All |
4 | Person-related variables + youngornotyoung | Only Young |
5 | Person-related variables + context-related variables + youngornotyoung | Only Young |
6 | Person-related variables + youngornotyoung | Only Not Young |
7 | Person-related variables + context-related variables + youngornotyoung | Only Not Young |
Founders | Mean Young | Mean Not Young | Pearson’s X² | Sig |
Person-related factors | ||||
Businessangel | 0.10 | 0.10 | 0.00 | |
Education | 0.92 | 0.91 | 0.20 | |
Fearoffailure | 0.17 | 0.20 | 1.50 | |
Gender | 0.24 | 0.38 | 16.15 | *** |
HHIncome (annual, 1000 €) | 26,618.23 | 31,611.57 | 15.51 | *** |
Skills | 0.67 | 0.87 | 61.97 | *** |
Context-related factors | ||||
Career | 0.63 | 0.44 | 30.84 | *** |
Goodopp | 0.58 | 0.63 | 1.67 | |
Knowent | 0.62 | 0.66 | 1.45 | |
Respect | 0.79 | 0.71 | 6.35 | ** |
Non-founders | ||||
Person-related factors | ||||
Businessangel | 0.03 | 0.04 | 16.58 | *** |
Education | 0.89 | 0.83 | 102.96 | *** |
Fearoffailure | 0.39 | 0.47 | 91.91 | *** |
Gender | 0.45 | 0.50 | 38.38 | *** |
HHIncome (annual, 1000 €, categories) | 18,372.34 | 25,195.37 | 406.31 | *** |
Skills | 0.20 | 0.44 | 975.48 | *** |
Context-related factors | ||||
Career | 0.64 | 0.47 | 417.67 | *** |
Goodopp | 0.40 | 0.38 | 8.02 | *** |
Knowent | 0.27 | 0.26 | 2.00 | |
Respect | 0.84 | 0.78 | 86.47 | *** |
Independent Variables | Model 1 Odds Ratios | Model 2 Odds Ratios | Model 3 Odds Ratios |
---|---|---|---|
Person-related factors | |||
Businessangel (1 = yes, 0 = no) | 1.600 *** (0.08) | 1.104 (0.086) | |
Education (1 = yes, 0 = no) | 1.632 *** (0.082) | 1.440 *** (0.091) | |
Fearoffailure (1 = yes, 0 = no) | 0.400 *** (0.056) | 0.455 *** (0.063) | |
Gender (1 = female, 0 = male) | 0.542 *** (0.18) | 0.584 *** (0.193) | |
Youngornotyoung (1 = not young, 0 = young) | 1.241 *** (0.069) | 0.588 *** (0.097) | 0.593 *** (0.105) |
Youngornotyoung # Gender (not young.female) | 1.557 ** (0.186) | 1.502 ** (0.201) | |
HHIncome (lowest 33% tile) (1 = yes, 0 = no) | 0.947 (0.063) | 0.977 (0.07) | |
HHIncome (highest 33% tile) (1 = yes, 0 = no) | 0.977 (0.054) | 0.844 *** (0.061) | |
Skills (1 = yes, 0 = no) | 6.268 *** (0.062) | 4.468 *** (0.069) | |
Context-related factors | |||
Career (1 = yes, 0 = no) | 0.993 (0.053) | ||
Goodopp (1 = yes, 0 = no) | 1.64 *** (0.054) | ||
Knowent (1 = yes, 0 = no) | 3.481 *** (0.055) | ||
Respect (1 = yes, 0 = no) | 0.793 *** (0.06) | ||
Intercept | 0.05 *** (0.066) | 0.031 *** (0.130) | 0.026 *** (0.156) |
Goodness-of-fit | |||
R2 | 0.00 | 0.13 | 0.18 |
Hosmer-Lemeshow Sig. | - | 0.37 | 0.77 |
Observations | 46,724 | 33,809 | 24,609 |
Independent Variables | Model 4 Odds Ratios | Model 5 Odds Ratios | Model 6 Odds Ratios | Model 7 Odds Ratios |
---|---|---|---|---|
Person related factors | ||||
Businessangel (1 = yes, 0 = no) | 1.529 (0.275) | 1.116 (0.287) | 1.605 *** (0.084) | 1.099 (0.091) |
Education (1 = yes, 0 = no) | 1.284 (0.291) | 1.100 (0.304) | 1.673 *** (0.085) | 1.478 *** (0.096) |
Fearoffailure (1 = yes, 0 = no) | 0.341 *** (0.207) | 0.355 *** (0.219) | 0.403 *** (0.059) | 0.465 *** (0.066) |
Gender (1 = female, 0 = male) | 0.585 *** (0.184) | 0.625 ** (0.198) | 0.839 *** (0.051) | 0.873 ** (0.057) |
HHIncome (lowest 33% tile) (1 = yes, 0 = no) | 0.837 (0.199) | 0.922 (0.214) | 0.969 (0.066) | 0.996 (0.075) |
HHIncome (highest 33% tile) (1 = yes, 0 = no) | 1.283 (0.199) | 1.220 (0.214) | 0.959 (0.056) | 0.819 *** (0.064) |
Skills (1 = yes, 0 = no) | 7.076 *** (0.164) | 5.373 *** (0.175) | 6.156 *** (0.067) | 4.357 *** (0.075) |
Context related factors | ||||
Career (1 = yes, 0 = no) | 1.057 (0.177) | 0.985 (0.056) | ||
Goodopp (1 = yes, 0 = no) | 1.207 (0.171) | 1.704 *** (0.057) | ||
Knowent (1 = yes, 0 = no) | 2.944 *** (0.177) | 3.539 *** (0.058) | ||
Respect (1 = yes, 0 = no) | 0.931 (0.22) | 0.782 *** (0.062) | ||
Intercept | 0.035 *** (0.333) | 0.031 *** (0.414) | 0.018 *** (0.106) | 0.015 *** (0.133) |
Goodness-of-fit | ||||
R² | 0.17 | 0.20 | 0.12 | 0.18 |
Hosmer-Lemeshow Sig. | 0.99 | 0.92 | 0.25 | 0.93 |
Observations | 3086 | 2303 | 30,723 | 22,306 |
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Sternberg, R.; Breitenbach, D. Youth Entrepreneurship in Germany: Empirical Evidence on the How, the Why, the How Many, the Who and the When. Economies 2023, 11, 161. https://doi.org/10.3390/economies11060161
Sternberg R, Breitenbach D. Youth Entrepreneurship in Germany: Empirical Evidence on the How, the Why, the How Many, the Who and the When. Economies. 2023; 11(6):161. https://doi.org/10.3390/economies11060161
Chicago/Turabian StyleSternberg, Rolf, and David Breitenbach. 2023. "Youth Entrepreneurship in Germany: Empirical Evidence on the How, the Why, the How Many, the Who and the When" Economies 11, no. 6: 161. https://doi.org/10.3390/economies11060161