Gem Case Study

Question 1

In the GEM study, independent variables include policies and initiatives introduced by governments to stimulate entrepreneurship. These encompass programs encouraging entrepreneurship outside typical age groups, resource availability for women, postsecondary education in entrepreneurship, and fostering a culture that validates entrepreneurship. The dependent variables include national economic growth indicators such as GDP growth rates, employment rates, and business start-up rates, which reflect the success of entrepreneurial activities driven by the policies.

Question 2

Some of these intervening and moderating variables are undoubtedly influencing the complex relationship between government policy and entrepreneurial outcomes in the GEM study, and much of the advantage of the GEM study’s 10 nation approach (that is, to attempt to control for intervening, extraneous conditions) was that certain features of the 10 nations were very similar. Entrepreneurial policies do not always lead to the policy’s intended outcomes, and rather, the outcomes are shaped by intervening variables like individuals’ perception of opportunity, and their personal motivation to engage in business activities. For example, even with supportive policies, entrepreneurship may still depend on whether individuals perceive opportunities and are willing to act upon them. The aim of the study was to isolate these subjective, but influential factors in the relationship between policy initiatives and the actual entrepreneurial activity by capturing these perceptions across multiple countries.

Extraneous variables are such factors as the cultural acceptance of risk, political stability, and the broader economic environment, which differ greatly from country to country. These conditions could separately affect entrepreneurial behavior apart from the policies examined. An example of this is that in some countries, a culture that celebrates innovative work will naturally produce entrepreneurial activities, but in others, economic hardship may squash entrepreneurial activities regardless of supportive policies. The GEM study sampled a large and diverse group of countries across the cultural, political, and economic spectrum in order to reduce the possibility that the confounding effects of these extraneous factors would confound the results (Zacharakis et al., 1999).

Question 3

Conducting a causal study without controlling for intervening, extraneous, and moderating variables poses huge challenges that will greatly affect outcome variables and cause confounding results. The intervening variables of personal motivation and perceived opportunity directly affect entrepreneurial outcomes, potentially distorting results until corrected. Thus, even if government policies promote entrepreneurship, individuals’ motivations or the culture of risk-taking limit the extent to which they are successful. Similarly, other variables outside the scope of policies being examined, such as political stability, the economics of the country, and its cultural norms, affect entrepreneurship apart from the policies at hand. If we are unable to control them, is there really a real effect of the policies on some entrepreneurship rates?

Additionally, the level of economic development or the society’s infrastructure can have an effect, either amplifying or attenuating the connection between the policies and entrepreneurial outcomes. The complexities are acknowledged by the GEM study, which uses a longitudinal, cross-national design that improves the robustness of the findings by looking at patterns in time across many different countries. This approach sacrifices nearly total control in reality, but does so while reducing variability and increasing the reliability of the identified causal relationships, giving the study more power to infer causation despite these practical constraints (Reynolds et al., 1999).

Question 4

Using national experts (or key informants) to fairly assess and evaluate entrepreneurial framework conditions gives context-specific insights into how those conditions really work locally, and this is a good way of understanding the detail variations in entrepreneurship across each nation. Typically, these experts are quite familiar with their respective country’s economic and culture climate, which can provide you with an in-depth local perspective of things such as regulatory frameworks, societal attitudes towards entrepreneurship, and local resources and infrastructure available to new ventures. In areas where quantitative data leave elements unrecorded, such as cultural attitudes or unspoken social norms that impact entrepreneurial activity, this local expertise is particularly beneficial.

However, relying on national experts also brings in potential biases since their views may be shaped by personal beliefs or professional backgrounds. The results of the survey may be skewed depending on the experts’ views of what is successful entrepreneurship or the required conditions for enabling business growth. Challenges addressed by the GEM study included the use of a diverse pool of experts from various fields and the use of structured, hour long interviews alongside a detailed standardized questionnaire. Its aim was a balance of individual viewpoints, between making data sources comprehensive for experts and comparable across nations. In order to facilitate this reduction in subjective bias and increase the reliability of the study, GEM took the time to incorporate these diverse perspectives (Reynolds et al., 1999).

Question 5

Due to the descriptive, ordinal, or interval nature of much of the causal study research design relies on, conducting a causal study with such data has inherent challenges as the data lacks the precision necessary to make strong causal inferences. Overviews or summaries, without indicating cause and effect relationships, in the descriptive data; ordinal data, ranking items without specifying the distance between items, provide limited ability to capture how one variable impacts upon another. While interval data are more precise than ordinal data, interval data still lacks a true zero point, and hence cannot show causality with absolute certainty.

In the GEM study, survey data from national samples uncovered general patterns, trends, and correlations between entrepreneurial attitudes and activities. Although such data can be useful for detecting the possibility of a relationship between two variables, they do not establish causality between the two variables. Aware of this limitation, GEM researchers complemented survey-based findings with data from structured expert interviews, which enhanced the contextualization of the quantitative results in terms of each nation’s explicitly country-specific entrepreneurial environment. In seeking to approximate causality in a GEM, the study acknowledges that causation is hard to confirm, given data limitations and the insuppressible influence of uncontrolled external factors.

References

Reynolds, P., Hay, M., & Camp, M. (1999). Global Entrepreneurship Monitor: 1999 Executive Report. Kauffman Center for Entrepreneurial Leadership of Ewing Marion Kauffman Foundation.

Zacharakis, A., Reynolds, P., & Bygrave, W. (1999). Global Entrepreneurship Assessment: National Entrepreneurship Assessment, United States of America, 1999 Executive Report. Center for Entrepreneurial Leadership of Ewing Marion Kauffman Foundation.

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From the A GEM of A Study case, answer the following questions:

• What are the independent and dependent variables in this study?
• What are some of the intervening, extraneous, and moderating variables that the study attempted to control with its 10-nation design?
• Can you do a causal study without controlling intervening, extraneous, and moderating variables?
• What is the impact on study results of using national experts (key informants) to identify and weigh entrepreneurial framework conditions?
• Can you do a causal study when much of the primary data collected is descriptive opinion and ordinal or interval data?

Please use peer-reviewed scholarly sources only.

Gem Case Study