The effect of social, cultural, and economic factors on entrepreneurship ☆ María-Soledad Castaño a, ⁎, María-Teresa Méndez b , Miguel-Ángel Galindo c a Facultad de CC. Económicas y Empresariales, Plaza de la Universidad, 1, 02071 Albacete, Spain b Facultad de CC. Económicas y Empresariales, Campus de Somosaguas, 28223 Madrid, Spain c Facultad de Derecho y Ciencias Sociales, Ronda de Toledo, s/n 13071 Ciudad Real, Spain abstract article info Article history: Received February 2014 Received in revised form October 2014 Accepted January 2015 Available online xxxx Keywords: Entrepreneurship Culture Innovation Economic growth Current economic downturn encourages extensive research into economic growth engines, with entrepreneur- ship as one of the key drivers of growth. Although crucial, determining which variables stimulate entrepreneurial activity constitutes a difficult task due to interrelated factors. This study analyzes three groups of factors affecting entrepreneurship and entrepreneurs' perceptions of opportunity: social, cultural, and economic variables. There- fore, this study employs the partial least squares method for two groups of countries: (1) European countries, and (2) Latin-American and Caribbean countries. This approach identifies how these factors' effects differ across different countries. © 2015 Elsevier Inc. All rights reserved. 1. Introduction Current economic downturn encourages extensive research into economic growth drivers. This research gains insight on how to face recession's negative effects by reducing unemployment levels in certain countries. Apart from quantitative variables constant in traditional eco- nomic growth models (e.g., investment and public spending), recent studies consider other variables for which statistical data is gradually becoming more readily available. Recently, scholars focus on variable entrepreneurship. Entrepreneurship has a positive effect on economic growth because of generating economic activity. Schumpeter and sever- al other authors assert at the beginning of the twentieth century that entrepreneurship is gradually becoming an engine of job creation and economic growth. Specialist literature considers entrepreneurial activity of high rele- vance (Acs & Szerb, 2007; Acs et al., 2012; Audretsch & Keilbach, 2004, 2008; Audretsch et al., 2006, 2008; Noseleit, 2013). Therefore, deter- mining the factors that may conduct to entrepreneurial activity is highly relevant to formulate policies that stimulate entrepreneurship. These factors may relate to entrepreneurs’ environment, or their motivations to pursue such an activity rather than settle for a job in paid employ- ment. Specialist literature considers general factors to do with the population, society, and institutions (Méndez-Picazo et al., 2012; Shane & Venkataraman, 2000), as well as factors to do with potential opportunity (Campbell & Mitchell, 2012). Factors affecting entrepre- neurship may have different origins. This study divides these factors into three categories: social, cultural, and economic factors. Section 2 explains how these factors affect entrepreneurship. Section 3 presents empirical analysis, developing two partial least square estimations for two groups: European countries and Latin-American and Caribbean countries using data from 2012. Section 4 provides conclusions. 2. Social, cultural, and economic factors, and entrepreneurship Many factors affect entrepreneurs' decisions to pursue a new business instead of accepting a job in paid employment. Leaving aside personal considerations, this study categorizes factors affecting entre- preneurship into three groups: Social, cultural, and economic. Although these factors interact among them, this section presents their effect entrepreneurship separately. Socially, the structure and social development of a country is an important factor, as well as culture. Strictly focusing on social issues, lit- erature often refers to Schumpeter's (1934) social climate. This concept involves the sociological, economic, and institutional climate of the soci- ety where entrepreneurs perform their activity. These factors include social values, training, economic freedom degree, and institutional quality. Therefore, a suitable social climate stimulates entrepreneurial activity, enhancing economic growth and job creation. To foster such social climate a solid institutional foundation is essen- tial. Scholars usually consider that creating institutions and improving their quality encourage market activity, avoiding economic shocks (Acemoglu et al., 2002; Nissan et al., 2012). These institutions usually comprise: (1) political environment (democracy): parliament, regulation Journal of Business Research xxx (2015) xxx–xxx ☆ The authors are grateful to contributions from Daniel Palacios, Universidad Politécnica de Valencia and Miguel-Ángel Sastre, Universidad Complutense de Madrid for their careful reading and suggestions on revising this essay. ⁎ Corresponding author. E-mail addresses: MariaSoledad.Castano@uclm.es (M.-S. Castaño), mmendezpi@ccee.ucm.es (M.-T. Méndez), mgalindomar@orange.es (M.-Á. Galindo). JBR-08297; No of Pages 5 http://dx.doi.org/10.1016/j.jbusres.2015.01.040 0148-2963/© 2015 Elsevier Inc. All rights reserved. Contents lists available at ScienceDirect Journal of Business Research Please cite this article as: Castaño, M.-S., et al., The effect of social, cultural, and economic factors on entrepreneurship, Journal of Business Research (2015), http://dx.doi.org/10.1016/j.jbusres.2015.01.040