Headlines 2016

One-size doesn't fit all EU countries


Within the framework of the EU project FIRES a first IFN-working paper has been published by Niklas Elert, IFN, and Selin Dilli, Utrecht University. In their study they have examined how 21 European countries and the United States cluster in entrepreneurial and institutional dimensions. The results reveal six country clusters, or entrepreneurial regimes. The main implication is that different reform strategies are appropriate to promote entrepreneurship and economic growth in European countries in different clusters.

The first cluster consists of the United States, the United Kingdom, and Ireland, which exhibit striking similarities in their formal and informal institutions but actually differ in their entrepreneurial regimes. The Nordic countries form a second group that is similar across all institutional dimensions and similar in their entrepreneurial regimes. Meanwhile, wide variation exists across continental Europe: Switzerland, the Netherlands and Austria form a group with an entrepreneurial regime akin to the Nordic regime but with another bundle of institutions, whereas Belgium and France are similar in all of the examined dimensions. Germany, however, clusters together with the Mediterranean countries, forming the least intuitive grouping. All the Eastern European countries form a final group that is relatively similar across the examined dimensions.

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