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Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study

Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study Small Bus Econ (2021) 57:425–453 https://doi.org/10.1007/s11187-020-00317-z Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study Steven A. Brieger & Anne Bäro & Giuseppe Criaco & Siri A. Terjesen Accepted: 9 January 2020 / Published online: 24 January 2020 The Author(s) 2020 Abstract This study explores the relationship be- and their choice to pursue social value creation as tween an entrepreneur's age and his/her social value supportive institutional environments allow entrepre- creation goals. Building on the lifespan developmen- neurs to follow their age-based preferences. We con- tal psychology literature and institutional theory, we firm our predictions using multilevel mixed-effects hypothesize a U-shaped relationship between entre- linear regressions on a sample of over 15,000 entre- preneurs’ age and their choice to create social value preneurs (aged between 18 and 64 years) in 45 coun- through their ventures, such that younger and older tries from Global Entrepreneurship Monitor data. The entrepreneurs create more social value with their findings are robust to several alternative specifica- businesses while middle age entrepreneurs are rela- tions. Based on our findings, we discuss implications tively more economically and less socially oriented for theory and practice, and we propose future re- with their ventures. We further hypothesize that the search directions. quality of a country’s formal institutions in terms of economic, social, and political freedom steepen the . . . Keywords Age Lifespan psychology Social value U-shaped relationship between entrepreneurs’ age . . Social entrepreneurship Entrepreneurship Formal institutions S. A. Brieger (*) University of Sussex Business School, University of Sussex, . . . . . Brighton, UK JEL classifications L26 L31 Q01 P48 M14 M16 e-mail: s.a.brieger@sussex.ac.uk A. Bäro Dr. Arend Oetker Chair of Business Psychology and Leadership, 1 Introduction HHL Leipzig Graduate School of Management, Leipzig, Germany e-mail: anne.baero@hhl.de Individuals’ orientation towards entrepreneurial activi- G. Criaco ties differs depending on where they stand in their Rotterdam School of Management, Erasmus University, lifespans (Gielnik et al. 2012; Kautonen et al. 2017; Rotterdam, The Netherlands Lévesque and Minniti 2006; Parker 2009). Prior re- e-mail: criaco@rsm.nl search provides strong empirical support for an inverted S. A. Terjesen U-shaped relationship between individuals’ age and College of Business, Florida Atlantic University, Florida, USA their entrepreneurial motivations, intentions, and behav- e-mail: sterjesen@fau.edu iors, showing that middle-aged individuals are typically S. A. Terjesen more likely to engage, or show an interest, in entrepre- Norwegian School of Economics, Bergen, Norway neurship (Bönte et al. 2009; Curran and Blackburn 426 S. A. Brieger et al. 2001; Funken and Gielnik 2015; Lévesque and Minniti goals seek to improve society by contributing towards 2006;Minolaet al. 2016; Parker 2009). basic needs fulfillment and well-being, positive Although existing research offers important in- health, and a healthy environment (De Ruysscher sights on the relationship between individuals’ age et al. 2017). Drawing on lifespan developmental psy- and their entrepreneurial behavior, we know little chology (Baltes et al. 2006; Ebner et al. 2006), we about which types of goals (i.e. social, economic, or argue that entrepreneurs’ priorities for social (versus environmental) entrepreneurs pursue in different life economic) objectives differ over the stages of their stages through their organizations. This knowledge lifetimes. More precisely, we hypothesize a U-shaped gap is surprising given that previous research in the relationship between an entrepreneur’s age and his/her social sciences identifies significant age differences willingness to create social value. We propose that the in people’s attitudes, values, intentions, and behav- focus on social value creation decreases with increas- iors. For instance, lifespan developmental psycholo- ing age throughout early middle adulthood, during gy argues that people’s goals and motives differ de- which entrepreneurs are more likely to prioritize per- pending on their lifespan stage (Baltes et al. 2006; sonal welfare and economic motives over social mo- Ebner et al. 2006). This perspective suggests that tives, and later increases again during late middle while younger people look for value recognition, adulthood. Accordingly, compared with middle-aged social acceptance, and social embeddedness, people entrepreneurs, younger and older entrepreneurs are in middle adulthood instead prioritize growth and more likely to prioritize social goals, which contribute maintenance, and older adults typically show higher to the wealth of their communities and societies. levels of conscientiousness (Carstensen 2006;Lang Moreover, we look at the role that formal institutions and Carstensen 2002;Robertsetal. 2006). Political play in modifying this relationship since institutions science research presents evidence for enduring birth are believed to regulate individuals’ behavior through cohort effects by showing that younger people give binding political, economic, and contractual rules more priority to postmaterialist values (self- (North 1990). We argue that a country’s institutional expression and quality of life) than materialistic quality moderates the curvilinear relationship be- values (economic and physical security) compared tween entrepreneurs’ age and social value creation, with their older counterparts (Inglehart 1997; such that better institutional quality steepens the U- Inglehart and Welzel 2005). People shift their values shaped relationship between entrepreneurs’ age and from materialist to postmaterialist once they experi- their choice to pursue social value creation through ence conditions free of economic and physical inse- their organizations; this is because supportive, well- curities. As, on average, younger cohorts grew up in designed institutional environments help entrepre- safer and more prosperous conditions than their older neurs to follow their preferences. counterparts, young people are more postmaterialist We find support for our predictions in a sample of which is linked with a rising sense for human auton- more than 15,000 entrepreneurs from 45 countries. Our omy, tolerance, trust, and equality (Inglehart 1997; study makes three key contributions. First, we contrib- Inglehart and Welzel 2005). ute to the role of individuals’ age in entrepreneurship In this study, we explore the relationship between research by moving beyond the effect of individuals’ entrepreneurs’ age and their social value creation age on “conventional” entrepreneurial motivation and goals by examining cross-sectional age differences entry (see e.g., Bönte et al. 2009; Curran and Blackburn in entrepreneurs’ choice to create social value through 2001; Levesque and Minniti 2006; Minola et al. 2016) their ventures. Social value creation is “defined to consider the goals these individuals pursue via their broadly as that which enhances well-being for the organizations. Our results show a U-shaped relationship earth and its living organism” (Brickson 2007,p. between entrepreneurs’ age and their willingness to contribute to the welfare of their communities and soci- 866). Entrepreneurs who follow social value creation eties, complementing the “classic” view of an inverted U-shaped relationship between individuals’ age and Notably, the focus of this study is not on social entrepreneurs or the entrepreneurship. Second, our study advances and ex- creation of social enterprises, but rather on how any entrepreneur might tends the current discourse on (multiple) value creation create social value, in addition to economic or other forms of value creation, in his/her business endeavors, depending on his/her age. goals in entrepreneurship by showing that economic and Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 427 social goals display different age patterns across entre- creates economic and social value creation, illustrating preneurs’ lifespan (Brieger and De Clercq 2019; that commercial and social orientation is not a binary Hechavarría et al. 2017; Hörisch et al. 2017, 2019). choice, but rather a matter of varying degrees. Third, we show that the quality of the institutional Since entrepreneurs who also create social value with environment where entrepreneurs operate moderates their ventures can play vital roles in alleviating social the relationship between entrepreneurs’ age and entre- problems, protecting the environment, and enhancing preneurial value creation goals. By linking lifespan de- their societies’ well-being and social cohesion, ques- velopmental psychology and institutional theory, we tions arise concerning the drivers of social value crea- provide a deeper understanding of when entrepreneurs tion. Recent research identifies both individual (e.g., prioritize social over economic objectives throughout gender, education, income) and contextual (e.g., wealth, their lifespans and across institutional conditions. Even culture, institutions) characteristics, as well as their in- if the cross-sectional design of our study does not allow terplay, as important determinants of entrepreneurs’ so- to draw any conclusion as to whether entrepreneurs cial value creation (Brieger and De Clercq 2019; Brieger change their value creation goals over their lifespan, et al. 2019; Hechavarría et al. 2017; Terjesen 2017). The our results provide initial evidence that entrepreneurs burgeoning literature is unclear as to whether there are in different age groups pursue different social value age-related patterns in the extent to which entrepreneurs creation goals through their businesses. create social value. 2.2 Lifespan Developmental Psychology 2 Theoretical background Lifespan developmental psychology focuses on human beings’ development of psychological functioning over 2.1 Entrepreneurship and social value creation their life courses (Baltes 1987;Baltes et al. 2006), and An increasing number of entrepreneurs prioritize social posits that human life is a continuous development, and value creation. By following not only commercial but no age period dominates. The normative regularities in also social objectives in doing business, entrepreneurs age groups (Kanfer and Ackerman 2004) suggest that seek to contribute to the natural (e.g., clean and healthy individuals at every life stage have the potential to environment) and social (e.g., relatedness, social cohe- change and grow (Baltes et al. 2006). Erikson’s(1959, sion, and security) resource endowment, and sometimes 1994) stage model of lifespan psychological develop- forgo their own advantages (e.g., in the form of higher ment postulates that adult development is epitomized by incomes) in the interest of the common good and wel- major challenges resulting from biological and cultural fare of their societies (Brieger and De Clercq 2019; imperatives which, in turn, impinge on people’ssocial Dacin et al. 2010; Terjesen 2017). life (Srivastava et al. 2003) and systematically affect Typically, entrepreneurs create both social and eco- people’s goals over their lifespans (Carstensen et al. nomic value at the same time. Economic and social 1999). value creation can complement each other, such as when Career development follows a normative path from an organization’s profits are used to provide goods and birth to late adulthood (e.g., Super 1980) with three services that meet social needs, i.e., philanthropic and distinct lifespan phases: young, middle, and late adult- charitable activities. For instance, Microsoft has created hood each associated with specific developmental tasks. enormous social impact, even if social value creation Individuals who successfully master these tasks can was never its primary goal (Acs et al. 2013). More than move to the next life phase (Kanfer and Ackerman one billion computers around the world use Microsoft’s 2004). According to lifespan psychology, young adult- software for business and home applications, thereby hood is a period of exploration and establishment char- improving the skills and opportunities of millions of acterized by a search for identity (Erikson 1994). Young people (Acs et al. 2013). Another example is the start- adults focus on social relations and peers while devel- up company Celise that produces corn starch–based oping their own identities. Moreover, young adults usu- straws, lids, utensils, and other products that address ally live in financially secure circumstances, due to a people’s needs for biodegradable and compostable prod- close affiliation to their parental home. Hence, young ucts. Celise founder Cameron Ross simultaneously adults pursue their individual life plans based on 428 S. A. Brieger et al. personal values and preferences, rather than focusing on meaningful goals in order to gain personal satisfaction mere economic objectives. Individuals develop their (Kooij et al. 2011;Lang and Carstensen 2002). objectives according to how much time they perceive Before discussing how entrepreneurs’ age may relate that they have left (Carstensen 1995). As young adults to social value creation under a lifespan psychology perceive time as open-ended, they prioritize goals aimed perspective, it is important to clarify the boundaries of at improving the world and “this also includes goals our study. Historically, lifespan developmental psychol- related to the task of finding out about one’srole in the ogy applies both cross-sectional and longitudinal de- society (e.g., receiving social acceptance)” (Lang and signs to study age effects, across a wide range of disci- Carstensen 2002, p. 125). This unconditional orientation plines such as business and social psychology, organi- towards social relations is also supported by previous zational behavior, and entrepreneurship (Allemand et al. research on lifespan developmental changes, suggesting 2007; Katzetal. 2019; Mackenzie et al. 2018;Nurmi that younger individuals particularly value recognition, 1989). Key to the understanding study design in lifespan social embeddedness, and affiliation to a social group, developmental psychology are the concepts of age, co- such as peers or the community they live in, while hort, and period effects, and their underlying differences forming their own social identities (e.g., Lang and (Schaie 1965). Cross-sectional designs helps to under- Carstensen 2002). stand variations among people who are in different Middle adulthood is a period of growth and mainte- stages of their life (Mackenzie et al. 2018; Salmela- nance. In middle adulthood, individuals direct their Aro and Upadyaya 2018). As summarized by Schmidt responsibilities towards supporting their own family, and Teti (2005,p.5), “this research approach stems from providing a home, raising offspring, and caring for the assumption that when an older age group is drawn elderly (Schaie 2016). The middle-aged adult falters from the same population as a younger age group, the between generativity, i.e., raising own children and thus eventual behavior of the younger group can be predicted guiding the next generation, and stagnation, i.e., earning from the behavior of the older group (Achenbach 1978). money, generating wealth, and being self-centered. Due Thus, a researcher can examine the relationship between to heavy financial obligations, parenthood burdens, and earlier and later behavior without actually waiting for high demands for family support, middle-aged adults development to occur (Achenbach 1978).” Importantly, are forcedtofoster goals and pursueanoccupationthat such cross-sectional age differences do not permit infer- successfully manages these life stage challenges ences about intra-individual changes and differences (Levinson 1986; Warr 2008). over time, but rather provide information about age Finally, late adulthood is a period of increasing con- changes or inter-individual differences in intra- scientiousness (Roberts et al. 2006) where individuals individual change. A limitation of these studies is that tend to critically evaluate their achievements in life and their external validity (i.e., generalizability) is possibly question their ability to make realizable improvements affected by historical and cultural differences between (Erikson 1994). Lifespan research suggests that per- cohorts, i.e., cohort effects. However, lifespan psychol- ceived future time left, and with it remaining opportu- ogy highlights that cross-sectional designs are beneficial nities, also predicts cognitive, emotional, and motiva- in that period effects are less likely to influence age tional changes potentially causing personal goal shifts differences (Ebner et al. 2006; Lindenberger and (Carstensen 2006; Lang and Carstensen 2002). Older Baltes 1997). Longitudinal designs are advantageous people oftentimes realize that their time is limited, and in allowing “direct inferences about intra-individual shift their priorities from their own career advancement change and inter-individual differences in intra- to greater generativity, i.e., assuming responsibility for individual change” (Lindenberger and Baltes 1997,p. the current young generation, sharing knowledge and 430). However, they are often also susceptible to a experiences, and giving something back to society after (single) cohort effect since the particular cohort under a rewarding professional career (Clegg and Fifer 2014; investigation may possess some unique characteristics Funken and Gielnik 2015; Kooij et al. 2011;Lang and or experience some unusual event that makes it unlike Carstensen 2002; Zacher et al. 2012). Consequently, another cohort of the same age (Schmidt and Teti 2005); growth motives play a subordinate role in late adulthood this, in turn, might impact the internal and external compared to middle adulthood (Kooij et al. 2011). Also, validity. Moreover, the validity of a simple longitudinal with increasing age, individuals prioritize emotionally research study can be threatened by the age at the time of Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 429 measurement (Schmidt and Teti 2005); this threat is societies’ welfare. Young entrepreneurs often receive most likely to impact such studies because it consists (economic) support from their family and community. of only one cohort and thus makes it impossible to Under conditions of financial security, young entrepre- separate out the independent effects of age and time of neurs’ basic needs are often met which can increase their measurement. In line with previous studies (Ebner et al. motivation to help others and therefore prioritize social 2006; Minolaetal. 2016; Nurmi 1989; Wiernik et al. value creation when structuring and running ventures. 2013), we apply lifespan developmental psychology in a As such, entrepreneurs in young adulthood are more cross-sectional design to study the implications of age inclined to follow their own life plans based on personal differences for social value creation at the present point values and preferences, and are less likely to focus on in time; we are interested in investigating age group commercial goals. Moreover, young entrepreneurs usu- differences in entrepreneurs’ social creation goals. Ac- ally perceive time as open-ended and therefore prioritize cordingly, we do not investigate how social value crea- world-improving goals. These preferences are illustrat- tion change as entrepreneurs mature (cf., Wiernik et al. ed by a famous quote attributed to Winston Churchill: 2013). “If a man is not a socialist by the time he is 20, he has no heart. If he is not a conservative by the time he is 40, he has no brain.” Previous research on entrepreneurial in- 3 Hypotheses tentions supports this notion, suggesting that compared to older counterparts, younger individuals are more 3.1 Entrepreneurs’ age and social value creation socially oriented, showed by higher engagement in so- cial entrepreneurship compared to older individuals We argue that entrepreneurs’ individual attitudes, goals, (Lepoutre et al. 2013; Stephan et al. 2015; Terjesen desires, and values differ depending on their age; such et al. 2016, Terjesen 2017). differences, in turn, are reflected in their businesses’ Addressing social goals, beyond mere economic varied value creation goals. This argument is in line goals, should also be more common for entrepreneurs with research on the micro-foundations of organization- in late adulthood when family and career obligations are al goals suggesting that “an organization’s goals may be usually less extensive and prominent (Kautonen et al. largely set by and reflect the interests, knowledge, and 2017). For instance, career development research sug- contingencies of a dominant coalition often located at gests that older entrepreneurs have usually already the levels of senior management, the organization’s achieved their major career goals resulting in a satisfac- founders, and/or its owners” (Linder and Foss 2018,p. tory income level (Gielnik et al. 2012). Hence, older 49). individuals consider entrepreneurial activities only as an Since priorities shift with age, entrepreneurs’ willing- additional source of income, not as a “principal wealth generator” (Heimonen 2013, p. 55). Older entrepreneurs ness to create economic or non-economic social value with their entrepreneurial activities should depend on can thus concentrate on goals related to societal well- their life stages. We hypothesize that entrepreneurs in being and a healthy environment. In addition, older middle adulthood will prioritize personal growth and adults typically show higher levels of conscientiousness. establishment (cf. Minola et al. 2016). As middle-aged Prior research on adult development and value transi- adults focus on growth-oriented goals regarding all tions emphasizes that when individuals go from midlife kinds of life topics and must handle greater financial to old age, their value orientation shifts from “instru- obligations to their families (Ebner et al. 2006), middle- mental” (such as financial security) to “terminal” values aged entrepreneurs will focus more on preventing finan- (such as the desire for world peace) (Ryff and Baltes cial insecurity, generating wealth, and maximizing 1976; as cited by Kanfer and Ackerman 2004). Numer- profits and growth, thereby pursuing economic goals ous studies suggest that older individuals place less with their businesses (cf. Warr 2008). Accordingly, priority on financial gains and personal wealth middle-aged entrepreneurs will prioritize economic con- (Heimonen 2013; Singh and DeNoble 2003;Warr siderations in doing business. 2008), and instead prioritize recognition, social On the other hand, entrepreneurs in young and late embeddedness, and affiliation to a community (Lang adulthood may display a higher willingness to pursue and Carstensen 2002). Extending these arguments to social objectives to contribute to their communities and the realm of entrepreneurship, we expect that older 430 S. A. Brieger et al. entrepreneurs will prioritize social value creation goals realized freedoms of movement of labor and goods, more over economic ones than middle-aged entrepre- freedom to invest), political freedoms (e.g., guaranteed neurs. Taken together, we hypothesize a curvilinear free and fair elections, transparent, predictable, and ac- relationship between entrepreneurs’ age and their social countable governance, policymaking and administra- goals: tion, and absence of corruption), and social freedoms (e.g., equality before the law, equal access to resources, Hypothesis 1: There is a U-shaped relationship and freedom of institutional discrimination) (De Haan between an entrepreneur’s age and his/her social and Sturm 2003;House 2014; Sigman and Lindberg value creation. 2019). Societies with high-quality institutions guarantee these types of freedoms and thus provide the ideal environment for entrepreneurs to start and grow a suc- 3.2 Entrepreneurs’ age and social value creation: cessful business. As such, formal institutional quality is the moderating role of institutional quality often proposed as a key driver for entrepreneurship (e.g., Estrin et al. 2013a; Goltz et al. 2015). Economic, polit- Institutions are defined as “persistent and connected sets ical, and social freedoms create economic opportunities of rules (formal and informal) that prescribe behavioral and help entrepreneurs to mobilize crucial resources, roles, constrain activity, and shape expectations” providing them with the voice and choice to make (Keohane 1989, p. 3) and can be distinguished as formal autonomous economic decisions, and guaranteeing en- institutions, which include rules and laws, and as infor- trepreneurs equal access to resources as well as equality mal institutions such as values, norms, and codes of before the law. Such favorable conditions typically re- conduct (North 1990). Formal and informal institutions duce transaction costs of entrepreneurial activity, i.e., play a critical role in shaping entrepreneurial activity cheap and less time-consuming entry regulations reduce (Autio et al. 2013; Bowen and De Clercq 2008;De barriers to new firm creation (Djankov et al. 2002; Clercq et al. 2014; Goltz et al. 2015;McMullen et al. Klapper et al. 2006). High-quality institutions also en- 2008). In addition to a direct influence, formal and able and help financial institutions and other service informal institutions indirectly affect entrepreneurship providers to develop, thereby facilitating entrepreneurs’ by moderating relationships between individual charac- access to capital and resources for scaling their entre- teristics (e.g., gender, income, education, social capital) preneurial initiatives (Estrin et al. 2013a). As a conse- and entrepreneurial intentions and actions (Brieger and quence, greater levels of entrepreneurial activity are De Clercq 2019;DeClercq etal. 2013, 2014; Pathak typically found in contexts characterized by less regula- and Muralidharan 2016; Wennberg et al. 2013). tion of credit and labor, lower levels of corruption, and a This study expands this literature by focusing on smaller government sector (Aidis et al. 2012;Nyström 2008; van Stel et al. 2007). formal institutions and how the quality of formal insti- tutions moderates the relationship between an entrepre- We hypothesize that institutional quality moderates neur’s age and his/her choice to create social value with the curvilinear relationship between entrepreneurs’ age his/her venture. While we do not believe that informal and their social value creation goals in doing business. institutions or even socioeconomic development play High-quality institutions provide entrepreneurs with the subordinate roles compared to formal institutions in liberty, security, capabilities, and accountability to set the relationship between entrepreneurs’ age and social goals in accordance with those associated with their value creation, we focus on formal institutions previous- position in the life phase (see hypothesis 1 above). ly shown as instrumental to understanding social entre- When embedded in an environment with strong and preneurial activity (Estrin et al. 2013a, b, 2016; well-designed institutions, middle-aged entrepreneurs Sahasranamam and Nandakumar 2018; Stephan et al. may feel more comfortable that they will be able to 2015). Moreover, previous research highlights that harvest the economic fruits of their efforts and initia- high-quality formal institutions are usually associated tives. High-quality institutions should empower entre- with certain cultural characteristics and socioeconomic preneurs in their ambitions to initiate or accelerate their development (Inglehart and Welzel 2005; Welzel 2013). business’ transformations. Investments and hard work Formal institutional quality is linked to guaranteed are required to achieve economic profits. In strong in- economic freedoms (e.g., property ownership, fully stitutional environments, entrepreneurs also know that Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 431 their entrepreneurial plans and actions are more predict- businesses. Low institutional quality also limits entre- able and less susceptible to external influences, thereby preneurs’ willingness to pursue economic goals in increasing feelings of control over financial risks and middle adulthood despite middle-aged entrepreneurs returns (Estrin et al. 2013a;Harper 2003;McMullen actually prefer to be economically oriented with their et al. 2008). Favorable access to resource endowments, venture in this life phase. This is because low institu- distributed power, equality, security, and accountability tional quality increases transaction costs, which in turn should motivate middle-aged entrepreneurs to realize may reduce financial rewards. Threats due to missing higher economic goals, while empowering younger property rights, poor law enforcement, heavy bureau- and older entrepreneurs to follow their non- cratic burdens, corruption, and unequal access to re- commercial goals to a larger extent. In environments sources or inequality before the law should reduce where people have a political voice and freedom to entrepreneurs’ willingness to pursue economic goals express themselves, where governments and adminis- in middle adulthood. Hence, while well-functioning trations are accountable and transparent, and economic institutions allow entrepreneurs to follow their innate and political institutions provide resources that create a orientations (whatever that would be), weak institu- sense of safety and security, entrepreneurs of younger tions limit them. Taken together, we hypothesize: and older ages should be more empowered to follow their stronger prosocial intentions. To conclude, under a Hypothesis 2: A country’s institutional quality strengthens the U-shaped relationship between stronger institutional context, middle-aged entrepre- an entrepreneur’s age and his/her social value neurs should be able to better realize their innate orien- creation. tation towards achievement, wealth, and financial secu- rity, resulting in lower social value creation. Conversely, Figures 1 and 2 summarize and visually illustrate our in such institutional settings, entrepreneurs in early and two hypotheses. late adulthood should be better able to realize their innate orientation towards world-improving goals and giving back to society, respectively. Given the above, under a stronger institutional context, the U-shaped 4Methodology relationship between entrepreneurs’ age and social value creation should be steepened. 4.1 Sample On the other hand, we expect the U-shaped relation- ship between entrepreneurs’ age and their social objec- We utilize the Global Entrepreneurship Monitor’s tives to flatten in contexts marked by weaker institu- (GEM) Adult Population Survey (APS), the largest tions. Weak institutional settings limit entrepreneurs’ multi-country research project on entrepreneurship pro- decision making towards varying value creation goals. viding individual and country-level harmonized data on Weak institutional environments demand entrepre- entrepreneurial attitudes, intentions, and efforts in over neurs who prioritize social value creation to fill insti- 100 countries (Bergmann and Stephan 2013;Hörisch tutional voids, but cannot provide the sufficient re- et al. 2017, 2019;Reynolds et al. 2004). In 2009, GEM sources that entrepreneurs need to pursue non- included a special topic on commercial, social, and commercial goals. Contexts with weak economic, po- environmental entrepreneurial activity. Entrepreneurs litical, and social freedoms tend to be economically in more than 50 countries answered questions related poorer and more collectivistic, thus motivating entre- to their business objectives, and the responses provide preneurs to focus primarily on the welfare of their in- the basis for our dependent variable. GEM follows a group and not of the wider society or all humanity. So, cross-sectional design, and is therefore most powerful even if entrepreneurs in young and late adulthood when combined with other data using multilevel re- would like to create social value to a larger extent, search methodology (Bergmann and Stephan 2013; they are unable to do so. In line with this, Brieger Bosma 2013). We incorporate macro-level data from et al. (2019) argue that entrepreneurs who are the World Bank and Freedom House. Our sample rep- empowered existentially, psychologically, and institu- resents each country’s adult working population (18– tionally tend to be more enabled, motivated, and enti- 64 years). In line with previous research, the sample is tled to pursue broader social goals with their weighted to each country’s census adult labor force 432 S. A. Brieger et al. Fig. 1 Relation between entrepreneurs’ age and social value creation (Hypothesis 1) (Hechavarría et al. 2017). Since the World Bank does points allocated to the two types of non-economic busi- not provide information for all countries in GEM ness goals, and label the variable “social value creation.” (Lepoutre et al. 2013; Terjesen et al. 2012), our final Previous research on social and environmental value sample comprises data from 15,339 entrepreneurs in 45 creation, which used the same items, finds that various countries. The countries represent all regions around the individual-level (e.g., gender, education, and income) world ranging from less developed to highly developed and country-level characteristics (e.g., wealth and countries. emancipative values) influence entrepreneurs’ non- commercial orientations (Brieger and De Clercq 2019; 4.2 Measures Brieger et al. 2019; Hechavarría et al. 2017;Hörisch et al. 2017, 2019). Dependent variable Our dependent variable captures the degrees to which an entrepreneur prioritizes social Independent variable Our independent variable is each value creation in doing business with the statement: entrepreneur’s age measured as a continuum from 18 to “Organizations may have goals according to the ability 64. We include the quadratic term of age (age squared) to generate economic value, societal value, and environ- to test for curvilinear effects. Research shows that age plays an important role for people’s “conventional” mental value. Please allocate a total of 100 points across these three categories as it pertains to your [venture’s] entrepreneurial motivation and entry (Bönte et al. goals.” Since the measure is ipsative and social value 2009; Levesque and Minniti 2006; Minola et al. 2016). creation includes both societal well-being and environ- For instance, Minola et al. (2016) find evidence for mental health (Brickson 2007; Mair and Marti 2006; curvilinear lifespan patterns in entrepreneurial desirabil- Dacin et al. 2010, 2011), we use the additive score of ity and feasibility beliefs. Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 433 Fig. 2 Relation between entrepreneurs’ age, institutional quality, and social value creation (Hypothesis 2) Moderating variables Institutional quality is measured (2016) show a positive influence of rule of law on social by three components: (1) economic freedom, (2) polit- entrepreneurial activity. ical freedom, and (3) social freedom. Economic freedom Political freedom combines two Freedom House captures each entrepreneur’scountry’sformalinstitu- measures of liberty: civil liberty and political rights. tional quality with Heritage’s Index of Economic Free- Civil liberty encompasses the freedom of the press, the dom (IEF). IEF measures 12 specific components of rights of people to assemble, hold alternative political economic freedom, scaled from 0 to 100: property and religious views, receive a fair trial, and express their rights, judicial effectiveness, government integrity, tax views without fear of physical retaliation. Political rights burden, government spending, fiscal health, business include free and fair elections, the ability to form polit- freedom, labor freedom, monetary freedom, trade free- ical parties, and popular sovereignty. The scores of both dom, investment freedom, and financial freedom. The scales range from 1 (greatest degree of freedom) to 7 index weights each category equally and averages them (smallest degree of freedom). We rescaled both mea- to produce an overall economic freedom score (for a sures according to the country’s highest degree of free- detailed description see Miller et al. 2018). We normal- dom and then normalized the scales from 0 for least ized the index into a scale ranging from 0 (least eco- political freedom to 1 for most political freedom. Final- ly, we averaged both scales to one political freedom nomic freedom) to 1 (most economic freedom). Nyström (2008) shows that economic freedom positive- index. Data are from the year 2008. Past research finds ly relates to “conventional” entrepreneurship, and a positive relationship between civic entitlements in McMullen et al. (2008) find a positive association of form of autonomy rights and political participation property rights and opportunity-driven entrepreneurial rights and social value creation in entrepreneurship activity. Both Estrin et al. (2013b) and Hoogendoorn (Brieger et al. 2019). Sahasranamam and Nandakumar 434 S. A. Brieger et al. (2018) also show that political institutions positively At the country level, we control for GDP per capita, moderate the positive effect of individual human capital GDP growth, and unemployment. Hoogendoorn (2016) and financial capital on social entrepreneurship. and Brieger and De Clercq (2019) provide evidence for Social freedom is a combined index based on V- a positive relationship between GDP and socially ori- Dem’s egalitarian component index and V-Dem’sequal- ented entrepreneurial activity. Several countries also ity before the law and individual liberty index, and thus include GDP growth and unemployment as controls, measures a country’s degree of equality before the law, but both variables are mostly insignificantly related to individual liberty, equal distribution of resources and socially oriented entrepreneurial activity (Brieger et al. power, and equal protection of rights. We averaged both 2019;Estrinetal. 2013b). scales, which range from 0 for weak social freedom to 1 for strong social freedom. The V-Dem data are from the 4.3 Data analysis year 2008. The role of social freedom for entrepreneurial activity has not yet been explored. However, Pathak and We test our hypotheses with multilevel mixed-effects Muralidharan (2018) recently show that income in- linear regression. Our dataset’s nested nature (individ- equality increases people’s likelihood to be engaged in uals nested in countries) renders multilevel modeling social entrepreneurship, while income mobility de- preferable to traditional regression techniques which creases it. tend to generate inefficient estimates and biased stan- dard errors (Snijders and Bosker 2012). To determine Control variables Consistent with previous GEM re- the need for multilevel modeling, we estimated the search, we include individual and country-level control between-country variance of the dependent variables. variables. At the individual level, we control for indi- We run an intercept-only model for our dependent var- viduals’ gender, household income, education, house- iable and calculate an intraclass correlation coefficient hold size, personal trait characteristics such as having (ICC; the percentage of total variance in the respective start-up skills or fearing failure, and if the respondent dependent variable that exists between countries). We knows an entrepreneur. Female gender is significantly find that about 14.5% of social value creation variations associated with social value creation in doing business lie between countries. ICCs are considered small, medi- (Brieger et al. 2019; Hechavarría et al. 2017). Several um, and large at 0.05, 0.10, and 0.15 respectively (Hox studies document that education positively relates to 2010). Hence, the results indicate that there is enough socially oriented entrepreneurial activity (Brieger and between-country variance to warrant a multilevel ap- De Clercq 2019; Brieger et al. 2019;Estrinetal. proach. We use Stata 15’s “mixed” command to conduct 2013b, 2016; Pathak and Muralidharan 2016;Stephan the multilevel linear regression. For our interaction et al. 2015). Prior studies report mixed results for house- models, we specify a multilevel linear regression with hold income. Brieger and De Clercq (2019)document a random intercept and a random slope for the age that household income is negatively associated with variable (Table 1). entrepreneurs’ social value creation goals. On the con- trary, Pathak and Muralidharan (2016)and Sahasranamam and Nandakumar (2018) report a posi- 5Results tive relationship of household income and social entre- preneurship. Household size is negatively linked to 5.1 Main results entrepreneurs’ social value creation (Brieger and De Clercq 2019; Brieger et al. 2019). Start-up skills Table 2 depicts our variables’ descriptive statistics. On (Pathak and Muralidharan 2016; Sahasranamam and average, entrepreneurs give much less priority to social Nandakumar 2018), fear of failure (Estrin et al. value (M = 35.94, SD = 25.59) than economic value 2013b), and knowing another entrepreneur (Estrin creation. The entrepreneurs’ average age is 41 years et al. 2013b; Sahasranamam and Nandakumar 2018) (SD = 11.72), and 37% of the participants are female. are positively related to social entrepreneurship. Brieger Nearly 37% of the entrepreneurs have at least post- et al. (2019) report a negative relationship between secondary education (M = 2.05, SD = 1.00), and more entrepreneurs’ fear of failure and level of social value than half are in the upper third household income range creation. (M = 1.42, SD = 0.73). Most entrepreneurs report Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 435 Table 1 Variables description Variable Description Individual-level variables Social value Allocate a total of 100 points across three categories of value creation goals: economic, environment, and social. creation Social value creation is an additive of each entrepreneur’s willingness to create social and environmental value with his or her business. Age Age in years (linear and squared). Gender Female (=1 ; 0 = male). Household income Lowest third (= 0), middle third (= 1), or upper third (= 2) household income distribution in the country of living. Education No educational background (= 0), some secondary education (= 1), secondary education (= 2), post-secondary education (= 3), or graduate experience (= 4). Start-up skills Has the knowledge, skill, and experience to start-up a business (= 1, 0 = otherwise). Fear of failure Would not start a business out of fear of failure (= 1, 0 = otherwise). Knows Knows someone who has started a business in the past 2 years (= 1, 0 = otherwise). entrepreneur Household size One household members (=1) to five and more household members (= 5). Country-level variables GDP p.C. (t-1) Gross domestic product (GDP) per capita (constant 2010 US$). Source: World Bank, 2008 data. GDP growth p.C. GDP growth per capita (annual %). Source: World Bank, 2008 data. (t-1) Unemployment Percentage of unemployed individuals among the working population. Source: World Bank, 2008 data. (t-1) Economic freedom Economic freedom is measured by the Index of Economic Freedom which assesses conditions in the four aspects of (t-1) institutional quality rule of law, government size, regulatory efficiency, and market openness. We normalized the index into a scale range with minimum 0 for least economic freedom and maximum 1 for most economic freedom. Source: Heritage, 2008 data. Political freedom Political freedom is measured by the Freedom House measured of liberty: civil liberty and political rights. The scores (t-1) of both scales range from 1 (greatest degree of freedom) to 7 (smallest degree of freedom). We rescaled both measures according to the country’s highest degree of freedom, and then normalized the scales to 0 for least political freedom to 1 for most political freedom. Finally, we averaged both scales to one political freedom index. Source: Freedom House, 2008 data. Social freedom Social freedom is a combined index based on V-Dem’s (1) egalitarian component index and (2) equality before the (t-1) law and individual liberty index. We averaged both scales, which range from 0 for weak social freedom to 1 for strong social freedom. Source: V-Dem, 2008 data. t-1 indicates lagged variables having the skills to start and run a business (M =0.83, economic freedom (r = 0.13, p < 0.01), political free- SD = 0.37) and less than one third of entrepreneurs dom (r = 0.07, p < 0.01), and social freedom (r = 0.08, indicate a fear of failure (M =0.29, SD =0.45). In addi- p < 0.01). We also find positive significant bivariate tion, more than half of the entrepreneurs report knowing relationships between social value creation and gender other entrepreneurs (M = 0.58, SD = 0.49). The institu- (r = 0.03, p < 0.01), education (r =0.11, p <0.01), tional quality variables economic freedom (M = 0.65, knows entrepreneur (r = 0.02, p < 0.01), and GDP p. SD = 0.10), political freedom (M = 0.74, SD = 0.30), C. (r = 0.15, p < 0.01). Social value creation is nega- and social freedom (M = 0.78, SD = 0.19) indicate a tively related to household income (r = −0.03, good variance in our sample. Table 3 depicts country- p < 0.01), fear of failure (r = − 0.03, p < 0.01), house- level descriptive statistics. hold size (r = − 0.06, p < 0.01), GDP growth p. C. (r = Table 4’s correlation matrix shows no significant − 0.09, p < 0.01), and unemployment (r = − 0.07, bivariate relationship between social value creation p < 0.01). and age (r = 0.01, n.s.), while social value creation is Table 5 contains the results of our multilevel regres- positively associated with the institutional variables sion models: Model 1 examines the controls. Model 2 436 S. A. Brieger et al. explores the direct effect of age on social value creation. significantly moderate the positive relationship between Model 3 adds the quadratic age term to test the curvi- age squared and social value creation. Thus, we can linear effect of age on social value creation. Models 4–6 partially support Hypothesis 2. include the interaction terms. To better understand the nature of the U-shaped Model 1 results show significant associations of relationship between entrepreneurs’ age and social entrepreneurs’ value creation goals and gender, in- value creation, we plot the corresponding graphs. come, education, GDP, and unemployment. Models Figure 3 shows a U-shaped relationship between 2 and 3 report the age effects on social value crea- age and social value creation, indicating that entre- tion. Model 2 reports a significant negative linear preneurs become more economically oriented when age term (β = − 0.095; p < 0.01). Model 3 results they reach middle age and more socially oriented in indicate a U-shaped pattern for the relationship be- young and old age. Entrepreneurs’ creation of social tween age and social value creation. As expected, value decreases with age to a turning point, after the coefficient of the linear term is negative and which social value creation increases again with significant (β = − 0.088; p < 0.01), whereas the coef- rising age. Notably, as we only include entrepre- ficient of the squared term is positive and significant neurs aged 18–64 years, the increase in social value (β =0.006; p < 0.01). The significant U-shaped rela- creation with higher age is limited by the restriction. tionship is stable across all models, supporting Hy- But if we also consider those entrepreneurs who are pothesis 1. older than 64 years old, the graph is even more Models 4–6 include the interaction terms. The results strongly U-shaped as older entrepreneurs tend to show that institutional quality strengthens the U-shaped report high levels of social value creation. structure between age and social value creation. Model 4 Figures 4, 5 and 6 show that the curvilinear relationships are moderated by the institutional qual- results indicate that economic freedom reinforces the negative linkage between age and social value creation ity variables economic freedom, political freedom, (β = − 0.573; p < 0.1) and positively moderates the pos- and social freedom. While strong economic freedom itive association of age squared and social value creation strengthens and thus steepens the U-shaped relation- (β = 0.049; p < 0.01). The results of Models 5 and 6 ship between entrepreneurs’ age and social value indicate that political (β =0.016; p < 0.01) and social creation, weak economic freedom seems to flatten freedom (β = 0.026; p < 0.01) positively and the curve such that the observed curvilinear Table 2 Descriptive statistics Variable N Mean SD Min Max Social value creation 15,339 35.944 25.585 0 100 Gender (female) 15,339 0.369 0.483 0 1 Age 15,339 41.121 11.723 18 64 Household income 15,339 1.416 0.732 0 2 Education 15,339 2.052 1.004 0 4 Start-up skills 15,339 0.833 0.373 0 1 Fear of failure 15,339 0.286 0.452 0 1 Knows entrepreneur 15,339 0.579 0.494 0 1 Household size 15,339 3.470 1.251 1 5 GDP p.C. 45 23,619.120 21,415.090 1237.677 90,806.840 GDP growth p.C. 45 1.844 3.496 − 10.119 10.281 Unemployment 45 7.721 4.523 2.550 23.300 Economic freedom 45 0.648 0.100 0.447 0.897 Political freedom 45 0.744 0.295 0.083 1.000 Social freedom 45 0.781 0.191 0.232 0.983 Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 437 Table 3 Country statistics Country Observations GDP p.C. GDP growth Unemployment Economic Political Social p.C. freedom freedom freedom Algeria 174 4396.76 0.75 11.33 0.56 0.25 0.61 Argentina 271 10,125.26 3.00 7.89 0.54 0.83 0.83 Belgium 191 44,995.29 − 0.05 6.98 0.72 1.00 0.97 Bosnia and 117 4566.88 5.50 23.30 0.54 0.58 0.81 Herzegovina Brazil 498 10,560.24 4.02 7.90 0.56 0.83 0.77 Chile 809 12,486.95 2.16 7.48 0.79 1.00 0.82 China 1022 3805.03 9.09 4.20 0.53 0.08 0.37 Colombia 601 6048.08 2.33 11.42 0.62 0.58 0.58 Croatia 141 14,782.67 2.09 8.53 0.54 0.83 0.88 Denmark 138 60,504.51 − 1.09 3.43 0.79 1.00 0.98 Dominican Republic 411 5120.62 1.79 14.16 0.58 0.83 0.67 Ecuador 591 4624.19 4.57 7.31 0.55 0.67 0.80 Finland 220 49,366.64 0.25 6.37 0.75 1.00 0.97 Germany 456 42,367.62 1.27 7.52 0.71 1.00 0.97 Greece 292 29,876.52 − 0.60 7.76 0.61 0.92 0.93 Hong Kong 41 31,553.63 1.52 3.56 0.90 0.58 0.90 Hungary 248 13,794.42 1.07 7.82 0.68 1.00 0.89 Iceland 245 46,531.31 −0.35 2.95 0.76 1.00 0.94 Iran 376 5914.61 −0.20 10.48 0.45 0.17 0.48 Israel 132 29,930.69 1.24 7.70 0.66 0.92 0.79 Italy 72 37,587.57 −1.70 6.72 0.63 0.92 0.93 Jamaica 443 5150.36 −1.28 10.33 0.66 0.75 0.73 Japan 129 45,165.88 −1.14 3.98 0.73 0.92 0.96 Jordan 261 4073.39 2.76 12.70 0.64 0.33 0.60 Korea 289 20,848.55 2.09 3.16 0.69 0.92 0.91 Latvia 243 13,242.73 −2.59 7.74 0.68 0.92 0.91 Malaysia 130 8991.76 1.55 3.34 0.64 0.50 0.62 Morocco 67 2705.79 4.74 9.57 0.56 0.42 0.60 Netherlands 301 52,121.20 1.30 2.75 0.77 1.00 0.96 Norway 236 90,806.84 −0.86 2.55 0.69 1.00 0.98 Panama 240 7691.55 6.74 5.85 0.65 0.92 0.81 Peru 421 4701.90 7.80 6.64 0.64 0.75 0.65 Romania 38 8872.78 10.28 5.79 0.62 0.83 0.83 Russia 26 11,089.93 5.29 6.32 0.50 0.25 0.60 Saudi Arabia 170 18,465.97 5.75 5.08 0.63 0.08 0.30 Slovenia 368 25,448.94 3.14 4.37 0.60 1.00 0.94 South Africa 141 7465.39 1.79 22.91 0.63 0.83 0.76 Spain 1663 32,304.62 −0.48 11.25 0.69 1.00 0.95 Switzerland 216 75,424.28 0.99 3.35 0.80 1.00 0.97 United Arab Emirates 200 43,045.33 − 10.12 4.01 0.63 0.25 0.60 UK 1473 40,315.57 − 1.41 5.62 0.79 1.00 0.92 USA 357 49,364.64 − 1.23 5.78 0.81 1.00 0.87 Uruguay 246 10,698.08 6.82 7.70 0.68 1.00 0.91 438 S. A. Brieger et al. Table 3 (continued) Country Observations GDP p.C. GDP growth Unemployment Economic Political Social p.C. freedom freedom freedom Venezuela 98 14,687.98 3.61 6.85 0.45 0.50 0.64 Yemen 537 1237.68 0.76 14.97 0.54 0.33 0.23 Mean 340.67 23,619.12 1.84 7.72 0.65 0.74 0.78 relationship becomes more linear, indicating lower 5.2 Robustness checks levels of differences in social value creation among young, middle, and older-aged entrepreneurs. Fig- We run several robustness checks to test the robustness ures 5 and 6 show that the negative effect of entre- of our theorizing and findings. First, because of the preneurs’ age on social value creation does not turn cross-sectional nature of our data, one might criticize to a positive one at higher ages if entrepreneurs live our findings as influenced by differences between dif- in countries that are marked by weak political and ferent birth cohorts or selection effects. For example, social freedoms. In countries with weak political and millennial entrepreneurs might report higher levels of social freedoms, the negative relationship between social value creation because this cohort had more ex- entrepreneurs’ age and social value creation remains posure to environmental and social issues compared to stable, which might be explained by the fact that generation X entrepreneurs. While we cannot complete- older entrepreneurs have to care more for them- ly rule out this possibility in our study, it is worth noting selves and their direct family members when they that baby boomer entrepreneurs (individuals born be- do not have equal rights, equal access to resources tween 1945 and 1964) have similar venture goals as and power, or even miss the opportunities to create compared with the late millennial entrepreneurs (those political and social changes. individuals born 1983 and 1996) despite being closer to Table 4 Correlation matrix 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1. Social value 1 creation 2. Gender (female) 0.03 1 3. Age 0.01 − 0.03 1 4. Household − 0.03 − 0.10 − 0.01 1 income 5. Education 0.11 − 0.02 − 0.05 0.23 1 6. Start-up skills 0.02 − 0.05 − 0.01 0.11 0.12 1 7. Fear of failure − 0.03 0.06 − 0.01 − 0.05 − 0.06 − 0.14 1 8. Knows 0.02 − 0.07 − 0.17 0.11 0.09 0.12 − 0.03 1 entrepreneur 9. Household size − 0.06 0.01 − 0.18 0.10 − 0.12 − 0.02 0.03 0.02 1 10. GDP p.C. 0.15 − 0.03 0.23 0.05 0.30 0.07 − 0.04 − 0.05 − 0.27 1 11. GDP growth − 0.09 0.07 − 0.11 − 0.07 − 0.26 − 0.09 0.00 0.09 0.09 − 0.55 1 p.C. 12. Unemployment − 0.07 − 0.01 − 0.14 0.00 − 0.12 0.04 0.06 − 0.04 0.16 − 0.44 − 0.09 1 13. Economic 0.13 0.00 0.22 0.03 0.28 0.10 − 0.06 − 0.07 − 0.20 0.67 − 0.47 − 0.32 1 freedom 14. Political 0.07 0.02 0.22 0.04 0.22 0.14 − 0.02 − 0.08 − 0.21 0.57 − 0.42 − 0.11 0.72 1 freedom 15. Social freedom 0.08 − 0.01 0.24 0.06 0.23 0.14 − 0.03 − 0.06 − 0.23 0.66 − 0.44 − 0.23 0.67 0.92 1 Correlations in italics are significant at p < 0.01. The sample includes 45 countries (N =15,339) Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 439 Table 5 Main results Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Constant 27.160*** 27.720*** 26.580*** 26.860*** 26.950*** 27.480*** (5.029) (5.072) (5.118) (4.826) (5.572) (5.476) Individual-level controls Gender (female) 1.566** 1.506** 1.575** 1.564** 1.542** 1.527** (0.731) (0.713) (0.721) (0.717) (0.720) (0.722) Household income Reference = Household income is low Middle − 1.024 − 1.010 − 0.982 − 0.796 − 0.838 − 0.819 (0.716) (0.713) (0.720) (0.713) (0.716) (0.713) High − 2.404** − 2.316** − 2.268** − 2.124** − 2.157** − 2.161** (0.960) (0.949) (0.946) (0.926) (0.932) (0.932) Education Reference = Education is none Some secondary 1.641 1.157 1.239 1.496 1.471 1.480 (1.168) (1.221) (1.224) (1.208) (1.207) (1.200) Secondary 1.892* 1.175 1.278 1.486 1.475 1.517 (0.996) (1.008) (1.046) (1.040) (1.042) (1.031) Post-secondary 2.431* 1.761 1.932 2.234* 2.218* 2.257* (1.278) (1.329) (1.366) (1.343) (1.347) (1.335) Graduate experience 4.971*** 4.521*** 4.756*** 5.020*** 4.997*** 5.039*** (1.464) (1.477) (1.500) (1.559) (1.548) (1.541) Start-up skills 0.303 0.286 0.358 0.447 0.419 0.418 (0.938) (0.936) (0.924) (0.925) (0.933) (0.934) Fear of failure − 0.500 − 0.517 − 0.478 − 0.517 − 0.519 − 0.531 (0.707) (0.694) (0.698) (0.699) (0.701) (0.702) Knows entrepreneur 0.651 0.336 0.348 0.320 0.309 0.298 (0.652) (0.669) (0.674) (0.686) (0.680) (0.676) Household size Reference = Household size is one person 2persons − 1.205 − 1.051 − 1.257 − 1.359 − 1.357 − 1.380 (0.928) (0.951) (0.934) (0.922) (0.922) (0.914) 3persons − 1.424 − 1.583* − 1.490 − 1.643* − 1.670* − 1.662* (0.946) (0.932) (0.927) (0.916) (0.913) (0.912) 4persons − 1.775** − 1.894** − 1.645** − 1.788** − 1.780** − 1.746** (0.823) (0.846) (0.822) (0.829) (0.834) (0.837) 5persons andmore − 1.683* − 1.882** − 1.764* − 1.826* − 1.821* − 1.801* (0.957) (0.959) (0.952) (0.969) (0.969) (0.974) Country-level controls GDP p.C./100 0.023*** 0.024*** 0.024*** 0.021*** 0.022** 0.019** (0.007) (0.007) (0.007) (0.007) (0.009) (0.009) GDP growth p.C. − 0.088 − 0.076 − 0.070 − 0.058 − 0.082 − 0.096 (0.346) (0.344) (0.348) (0.354) (0.378) (0.376) Unemployment 0.580 0.569 0.564 0.583 0.547 0.553 (0.367) (0.371) (0.374) (0.374) (0.371) (0.355) Economic freedom 4.113 (13.960) Political freedom 0.028 (5.325) 440 S. A. Brieger et al. Table 5 (continued) Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Social freedom 4.292 (8.091) Independent variable Age − 0.095*** − 0.088*** − 0.106*** − 0.103*** − 0.105*** (0.029) (0.030) (0.031) (0.031) (0.031) Age 0.006*** 0.007*** 0.006*** 0.006*** (0.002) (0.002) (0.002) (0.002) Cross-level effects Age × Economic freedom − 0.573* (0.311) Age × Economic freedom 0.049*** (0.014) Age × Political freedom − 0.027 (0.081) Age × Political freedom 0.016*** (0.005) Age × Social freedom 0.011 (0.114) Age ×Social freedom 0.026*** (0.006) Intraclass coefficient 0.109 0.111 0.111 0.110 0.111 0.109 Individual-level variance 571.4*** 570.3*** 569.6*** 567.3*** 567.3*** 567.2*** Country-level variance 69.97*** 70.85*** 71.35*** 70.31*** 70.51*** 69.34*** AIC 141,158.5 141,132.4 141,117.1 141,090.6 141,095.8 141,092.4 Log likelihood − 70,559.3 − 70,545.2 − 70,536.6 − 70,519.3 − 70,521.9 − 70,520.2 *p <0.1; **p < 0.05; ***p < 0.01. Dependent variable: Social value creation. Standard errors are in parentheses. Mean-centered variables were used for independent and moderating variables. The sample includes 45 countries (N = 15,339) Fig. 3 Entrepreneur’s age and social value creation goals Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 441 Fig. 4 Entrepreneur’s age and social value creation goals: The moderating effect of economic freedom generation X entrepreneurs (those individuals born entrepreneurs’ social value creation [Wald chi-square = 1965 and 1982). To further disentangle cohort effects 20.27; p= 0.000]. Second, we test to determine whether from age effects in our data, we re-estimated our models age’s effect on social value creation decreases at low controlling for cohort effects. Controlling for such ef- values of age, and increases at high values of age. Our fects did not reveal different patterns of results; all results confirm a U-shaped relationship between age and coefficients were of similar magnitude and pointed in social value creation, as the slopes are negative and the same direction as our model based on the total significant at lower values of age (applies for the age sample (see results in Table 6). We are therefore confi- years 18 to 43) and positive and significant at high dent that the effects of entrepreneurs’ age are not cohort values of age (applies for the age years 57 to 64). We effects. also compared the AIC fits of a quadratic and a linear Second, we tested whether the inclusion of institu- model, and found that the quadratic model has a better tional quality still persists across the age distribution. fit. We also run a Sasabuchi’stest (1980) to test for the We thus performed quantile regression and see how presence of a U-shaped relationship using a country institutional quality behaves in each percentile. Results fixed-effects specification of Model 3. The result con- displayed in Table 7 show that the hypothesized effects firms the presence of a U-shaped relationship (t value = remains qualitatively stable across percentiles, suggest- 2.35; p < 0.01). Third, we follow Lind and Mehlum ing that the interactions are not distorting our main (2010) in using the Fieller approach to estimate confi- results. dence intervals for the extreme lower and upper bounds Third, we re-ran our analysis and excluded with of age (95% interval for an extreme point): the interval Spain, the UK, and China those countries with larger ranges from 41.74 to 55.36 years, with an extreme point sampling sizes. The results, which are available upon of 48.55 years. Fourth, we include all entrepreneurs request, are entirely in accordance with our initial above 64 years of age. We find very similar results, with findings. the exception that the U-shaped relationship between Moreover, we ran an additional set of analyses to test age and social value creation becomes even stronger and the robustness of our curvilinear relationship (see Haans more profound since entrepreneurs aged above 64 years report even higher levels of social value creation. Final- et al. 2016). All results are available upon request. First, we conduct a Wald test to evaluate the joint significance ly, we test the robustness of our U-shaped age effect by of age and age squared. The results indicate that the joint considering the stage of entrepreneurial activity, i.e., effect of direct and squared terms of age is significant for when controlling for nascent entrepreneurship—that is, all entrepreneurs who intend to start-up an own busi- We thank an anonymous reviewer for this suggestion. ness, but have not already done so. The result is in line 442 S. A. Brieger et al. Fig. 5 Entrepreneur’s age and social value creation goals: The moderating effect of political freedom with the one reported in Model 3 of Table 5,withthe and postmaterialist cultures are key components of a only difference that the coefficient of the linear term is “syndrome” of modernization in which economic, now significant at the 10% level, whereas the coefficient socio-cultural, and political trends are generally uni- of the squared term is now significant at the 5% level. formly and predictably linked (Inglehart and Welzel 2005; Welzel 2013). 5.3 Auxiliary analysis In line with this reasoning, we test whether the hu- man development index, postmaterialism, and While in our paper we focus on the role of formal Hofstede’s cultural value dimensions of individualism and power distance also moderate the relationship be- institution as moderators of the age-value creation goals relationship, in this auxiliary analysis, we investigate tween entrepreneurs’ age and social value creation. For completeness, we also included Hofstede’s two other whether informal institutions also play a role. While this conjecture goes beyond our theorizing, it is worth noting dimensions: uncertainty avoidance and masculinity. Ta- ble 8 results show that human development—which is a that previous research highlights that institutional free- doms, socioeconomic development, and individualist combined measure integrating people’s (1) health, (2) Fig. 6 Entrepreneur’s age and social value creation goals: The moderating effect of social freedom Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 443 Table 6 Robustness check results Model 7 Model 8 Model 9 Model 10 Model 11 Constant 28.240*** 27.350*** 27.750*** 27.830*** 28.360*** (5.041) (5.094) (4.804) (5.549) (5.439) Individual-level controls Yes Yes Yes Yes Yes Cohort Reference = Baby boomers Generation X − 1.346** − 1.113* − 1.209** − 1.216** − 1.226** (0.607) (0.610) (0.600) (0.585) (0.590) Millennials 0.222 − 1.277 − 0.975 − 1.030 − 0.984 (1.338) (1.462) (1.450) (1.458) (1.456) Country-level controls Yes Yes Yes Yes Yes Economic freedom 3.774 (13.960) Political freedom − 0.073 (5.300) Social freedom 4.083 (8.064) Independent variable Age − 0.111** − 0.129** − 0.145*** − 0.143*** − 0.144*** (0.050) (0.0530) (0.055) (0.054) (0.054) Age 0.005** 0.006*** 0.005** 0.005** (0.002) (0.002) (0.002) (0.002) Cross-level effects Age × Economic freedom − 0.575* (0.310) Age × Economic freedom 0.051*** (0.013) Age × Political freedom − 0.027 (0.080) Age × Political freedom 0.016*** (0.005) Age × Social freedom 0.007 (0.112) Age × Social freedom 0.027*** (0.006) Intraclass coefficient 0.111 0.111 0.110 0.110 0.109 Individual-level variance 569.8*** 569.6*** 567.2*** 567.2*** 567.1*** Country-level variance 71.10*** 71.23*** 70.16*** 70.35*** 69.20*** AIC 141,124.3 141,119.2 141,091.9 141,097.2 141,093.6 Log likelihood − 70,539.2 − 70,535.6 − 70,517.9 − 70,520.6 − 70,518.8 *p <0.1; **p < 0.05; ***p < 0.01. Dependent variable: Social value creation. Standard errors are in parentheses. Mean-centered variables were used for independent and moderating variables. All regressions control for individual and country-level variables as introduced in Table 5 above. The sample includes 45 countries (N = 15,339). Baby boomers (born 1945–1964), Generation X (born 1965–1982), Millennials (born 1983–1996) education, and (3) standard of living—steepens the U- age effect on social value creation), whereas individual- shaped relationship between entrepreneurs’ age and so- ism and masculinity strengthen the direct effect of age cial value creation. Moreover, postmaterialism on social value creation (but not the association of age strengthens the positive relationship between age squared and social value creation). Also, we find evi- squared and social value creation (but not the direct dence that power distance flattens the U-shaped 444 S. A. Brieger et al. Table 7 Quantile regression results Quantiles 25% 50% 75% 25% 50% 75% 25% 50% 75% Independent variable Age − 0.105*** − 0.113*** − 0.063** − 0.109*** − 0.112*** − 0.061** − 0.088*** − 0.113*** − 0.069** (− 4.700) (− 3.520) (− 2.420) (− 4.06) (− 3.09) (− 2.16) (− 3.32) (− 2.99) (− 2.53) Age 0.006*** 0.00329 0.004* 0.006*** 0.005* 0.003 0.005** 0.007** 0.005** (3.530) (1.33) (1.85) (3.29) (1.70) (1.42) (2.57) (2.20) (2.27) Cross-level effects Economic 3.462 1.410 − 6.706 freedom (0.730) (0.220) (− 1.630) ×Age − 0.260 − 0.429 − 0.615** (− 1.190) (− 1.420) (− 2.280) ×Age 0.043** 0.080*** 0.069*** (2.410) (3.430) (3.080) Political freedom − 11.720*** − 2.891* − 2.455*** (− 10.950) (− 1.820) (− 2.710) ×Age − 0.095 − 0.083 − 0.062 (− 1.570) (− 1.100) (− 0.740) ×Age 0.010** 0.023*** 0.027*** (2.130) (3.570) (3.720) Social freedom − 22.100*** − 5.350** − 2.607* (− 14.030) (− 2.370) (− 1.780) ×Age − 0.0574 − 0.0470 − 0.187** (− 0.560) (− 0.490) (− 2.160) ×Age 0.0189*** 0.0415*** 0.0524*** (2.940) (4.930) (7.790) *p <0.1; **p < 0.05; ***p < 0.01. Dependent variable: Social value creation. Quantile regressions for the 25th, 50th, and 75th percentiles. Standard errors are in parentheses. Mean-centered variables were used for independent and moderating variables. All regressions control for individual and country-level variables as introduced in Table 5 above relationship. Altogether, these findings indicate that all (Minola et al. 2014), or individuals nearing retirement variables that are closely intertwined with moderniza- (Heim 2015). While these studies significantly advanced tion also moderate the relationship between entrepre- our understanding of the role of individuals’ age on neurs’ age and social value creation. entrepreneurship, they present three important limita- tions. First, prior studies often build “on the traditional depiction of mainstream entrepreneurship as an individ- 6 Discussion ualistic and profit-maximizing endeavor” (Hechavarría et al. 2012, p. 137); yet, recent research provides sub- Entrepreneurship research has long focused on the stantial evidence that entrepreneurs pursue multiple busi- relationship between individuals’ age and ness objectives, seeking to not only make profits but their entrepreneurial activity. Existing literature mainly often also contribute to societal well-being and a healthy explores age differences in “conventional” entrepreneur- environment (e.g., Bacq et al. 2016;Cohenetal. 2008; ial motivation or behavior (Minola et al. 2016), or exam- Hörisch et al. 2017). Second, developmental theories ines different age groups separately, such as third-age such as lifespan psychology suggest that people’sinten- individuals (Kautonen et al. 2011), young entrepreneurs tions, goals, and motives differ depending on one’sstage Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 445 Table 8 Auxiliary analysis results Model 12 Model 13 Model 14 Model 15 Model 16 Model 17 Constant 26.520*** 24.200*** 25.360*** 23.610*** 23.820*** 26.440*** (5.018) (5.848) (6.719) (7.482) (8.025) (6.535) Individual-level controls Yes Yes Yes Yes Yes Yes Country-level controls Yes Yes Yes Yes Yes Yes Independent variable Age − 0.105*** − 0.112*** − 0.085** − 0.083** − 0.084*** − 0.083** (0.031) (0.033) (0.036) (0.035) (0.031) (0.034) Age 0.007*** 0.004*** 0.008*** 0.008*** 0.008*** 0.008*** (0.002) (0.002) (0.002) (0.002) (0.002) (0.002) Cross-level effects HDI 8.066 (22.780) ×Age − 0.105*** (0.031) ×Age 0.007*** (0.002) Postmaterialism values 2.001 (9.380) ×Age − 0.032 (0.151) ×Age 0.022*** (0.006) Uncertainty avoidance − 0.052 (0.055) × Age 0.002 (0.001) ×Age 0.000 (0.000) Power distance 0.093 (0.102) × Age 0.003** (0.001) ×Age − 0.000** (0.000) Individualism − 0.066 (0.118) ×Age − 0.004*** 0.000 ×Age (0.000) 0.000 Masculinity − 0.068 (0.105) ×Age − 0.004** (0.002) ×Age − 0.000 446 S. A. Brieger et al. Table 8 (continued) Model 12 Model 13 Model 14 Model 15 Model 16 Model 17 (0.000) Observations 15,339 13,234 12,797 12,797 12,797 12,797 Countries 45 35 36 36 36 36 Intraclass coefficient 0.109 0.118 0.120 0.120 0.120 0.119 Individual-level variance 567.1*** 562.1*** 569.3*** 569.3*** 569.5*** 569.4*** Country-level variance 69.66*** 75.50*** 77.78*** 77.41*** 77.50*** 77.18*** AIC 141,090.0 121,270.2 117,660.4 117,658.9 117,655.3 117,658.6 Log likelihood − 70,519.0 − 60,609.1 − 58,804.2 − 58,803.5 − 58,801.7 − 58,803.3 *p <0.1; **p < 0.05; ***p < 0.01. Dependent variable: Social value creation. Standard errors are in parentheses. Mean-centered variables were used for independent and moderating variables. HDI human development index in his/her lifecycle and, consequently, shift individuals’ the characteristics of the formal environment where goal orientations (Baltes et al. 2006;Ebneretal. 2006). these entrepreneurs are embedded. Compared to coun- While prior studies build on this perspective to assess tries with low institutional quality, countries with high what may trigger individuals’ entrepreneurial motivation institutional quality allow middle age entrepreneurs (Minola et al. 2016) or new venture growth (Gielnik et al. to follow their innate affinity towards personal wealth 2012), we know little about the relationship between and prosperity, whereas younger and older entrepreneurs’ age and the value creation goals they seek entrepreneurs to create higher social value. More spe- through their businesses. Third, the successful realization cifically, our analysis reveals that economic freedom of intentions, goals, and motives is “sensitive” to context steepens the U-shaped relationship between an entre- (Athayde 2009; Obschonka and Silbereisen 2012; preneur’s age and his/her social value creation. Evi- Stephan et al. 2015). However, previous research on the dently, well-functioning economic institutions seem to relationship between age and entrepreneurship either provide a fruitful environment for entrepreneurs to neglected this contextual perspective (Carsrud and pursue their goals. Conversely, environments with Brännback 2011; Gielnik et al. 2012; Obschonka and low-quality institutions provide more restrictive condi- Silbereisen 2012) or focused on cultural features tions that inhibit individual decision making, and thus (Minola et al. 2016). Consequently, a focus on institu- make it more difficult for entrepreneurs to pursue their tional characteristics in the age-value creation linkage individual preferences regarding value creation when provides a more complete understanding of structuring and running their venture, i.e., economic the conditions under which entrepreneurs may better value creation in middle adulthood, and social value realize their value creation goals. creation in young and old adulthood. As our figures Our study argues for age-dependent inter-individual demonstrate, the curvilinear relationship is flatter in differences in value creation goals by entrepreneurs. weak institutional settings, indicating that young, mid- Even if the cross-sectional dataset used in this dle, and old entrepreneurs may possess a more equal study does not allow to draw a final conclusion as to blend of both social and economic value creation goals, whether entrepreneurs change their value creation compared with entrepreneurs in stronger institutional goals over their lifespan, our results provide a first settings where the U-shaped relationship between en- evidence that entrepreneurs’ goals differ depending trepreneurs’ age and social value creation is steeper. In on their age and supposedly position in the lifespan. settings where political and social freedoms are weak, we find a linear negative relationship between entre- In that, entrepreneurs in their middle age are relatively more economically and less socially oriented, whereas preneurs’ age and social value creation goals, implying both younger and older entrepreneurs express higher that entrepreneurs are more commercially oriented socially oriented goals through their businesses. We with increasing age. This is understandable given the also find that cross-sectional age differences in entre- fact that the conditions under which entrepreneurs preneurs’ goals in doing business vary depending on operate are much more disadvantageous, and it might Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 447 be the case that responsibilities increase much more Parker 2009). By integrating the age-entrepreneurship with age in tougher environments. In sum, economic, debate with the multi-dimensionality of value creation political, and social freedoms influence entrepreneurial goals of entrepreneurs and their businesses, we theorize value creation and corresponding economic outcomes and show that a U-shaped relationship exists between since they affect how entrepreneurs may perceive costs entrepreneurs’ age and their perceptions to create social and benefits depending on their age (Boettke and value goals with their businesses. As such, this study Coyne 2009). Our results thus raise attention to insti- fundamentally refines our understanding of the extant tutional mechanisms that shape individuals’ entrepre- theory by challenging the well-established inverted U- neurial activities at different life stages and in different shaped relationship between individuals’ age and countries. entrepreneurship. Interestingly, the results from our auxiliary analysis Second, our study shows that entrepreneurs’ creation also suggest that informal institutions also influence the of social value through their organizations changes relationship between entrepreneurs’ age and their social across different age groups. We respond to both calls value creation goals. This seems logical given the fact to broaden the scope of entrepreneurial value creation that high-quality institutions, which guarantee people’s (Amit et al. 2001; Cohen et al. 2008; Hechavarría et al. economic, political, and social freedoms, are typically 2017) and to apply a developmental perspective surrounded by empowering existential and cultural con- to entrepreneurship research (Carsrud and Brännback ditions (Inglehart and Welzel 2005; Welzel 2013). As 2011; Gielnik et al. 2012; Lévesque and Minniti 2006; Welzel (2013) points out in “Freedom Rising,” human Minola et al. 2016; Obschonka and Silbereisen 2012). empowerment advances on a three-lane trajectory Focusing solely on financial-related goals and outcomes consisting of (1) a socioeconomic development in form in entrepreneurship leads to an incomplete understand- of incomes and education (which generate capabilities ing of entrepreneurial behavior in individuals (Zahra to exercise universal freedoms), (2) an emancipative and Wright 2011). By broadening the scope to relevant culture that prioritizes autonomy, choice, and self- dependent variables such as entrepreneurs’ social value expression (which embody motivations to exercise uni- creation goals and by taking a developmental perspec- versal freedoms), and (3) civic entitlements (which es- tive into account, this study advances and extends the tablish guarantees to exercise universal freedoms). current discourse on (multiple) value creation goals in Based on large cross-national samples, Welzel argues entrepreneurship (e.g., Brieger et al. 2019; Hechavarría and shows empirically that socioeconomic development et al. 2017; Hörisch et al. 2017, 2019). culminates into an emancipative culture, which, in turn, Third, we contribute to the scholarly debate on insti- motivates people to be involved in social movement tutional theory in entrepreneurship research (Bruton activities to introduce, defend, and extend civic entitle- et al. 2010; De Clercq et al. 2013) by showing that ments in form of economic, political, and social free- formal institutions influence the relationship between doms (Welzel 2013). Consequently, as socioeconomic, entrepreneurs’ age and their value creation goals. Our cultural, and institutional conditions are usually multilevel approach predicts age-related differences in interlinked, we find also significant moderating effects the extent to which entrepreneurs create social value of socioeconomic and cultural factors. with their businesses. Drawing on lifespan developmen- tal psychology and institutional theory, we argue and 6.1 Theoretical contributions empirically show that the quality of formal institutions influences the relationship between entrepreneurs’ age Our study provides three main contributions to theory. and their value creation goals. We show that a country’s First, we are among the first to theoretically argue and institutional quality is a key contingency that helps empirically show cross-sectional age differences in so- explaining entrepreneurs’ value preferences. We also cial value creation goals of entrepreneurs. Existing stud- contribute to the debate around institutional theory and ies dealing with individuals’ age and entrepreneurship social value creation (Brieger et al. 2019; Hechavarría typically focus on “conventional” entrepreneurship by 2016) by introducing an age perspective to such debate. showing that an individual’s desire to start a venture Previous research investigates the direct and indirect increases up to middle age and decreases thereafter (e.g., effects of formal and informal institutions on Funken and Gielnik 2015; Lévesque and Minniti 2006; socially oriented entrepreneurial activity. By applying 448 S. A. Brieger et al. both lifespan developmental psychology and institution- 6.2 Policy and practical implications al theory to the field of entrepreneurship, we deliver a new profound understanding of how entrepreneurs’ Our results offer important implications for policy and value creation preferences vary across different age practice. Knowing the existence of cross-sectional age groups as well as how entrepreneurs can be supported differences in entrepreneurs’ value creation goals, poli- by their countries’ institutions to achieve such pref- cy makers should design age-group specific policies to erences. Thus, we present new insights into the fac- help entrepreneurs achieving their different goals. For tors that relate to social (and economic) value crea- instance, countries could implement entrepreneurship tion in entrepreneurship across countries, thereby programs targeted at improving third-age entrepreneurs’ contributing to the ongoing debate in (social) understanding of how they can implement, integrate, entrepreneurship research (e.g., Dacin et al. 2010, and sustain societal goals in their businesses (e.g., 2011; Hoogendoorn 2016;Mairand Marti 2006, Howorth et al. 2012). Moreover, policy makers must 2009; Zahra and Wright 2011). acknowledge that their countries’ institutional quality is Finally, with our auxiliary analyses, we provide em- an important factor in the age-value creation linkage and pirical evidence that not only formal institutions but also that borrowing successful policies from countries with socioeconomic development and culture influence the very diverse institutional settings to stimulate social relationship between entrepreneurs’ age and their value value creation in entrepreneurs may not always be effi- creation goals. Many studies have provided evidence of cient. Instead, policy makers should create favorable the key role that formal institutions play for social and supportive institutional environments that allow entrepreneurial activity. However, some authors such entrepreneurs to follow their innate preferences. More- as Inglehart and Welzel (2005) have shown that societies over, policy makers may try to strengthen the abundance with high-quality formal institutions tend to have a of empowering resources such as income and education. higher level of prosperity and an emancipated culture Previous research already documented that supportive that give priority to autonomy, self-expression, and ini- existential conditions could stipulate social value crea- tiative at the same time. Consequently, if formal institu- tion (Brieger 2019; Hoogendoorn 2016). In line with tions influence social value creation, this should also this research, our auxiliary analysis reveals that apply to socioeconomic development and culture. Initial higher levels of socioeconomic development may al- evidence for this conjecture was recently provided by low entrepreneurs to follow their innate preferences. Brieger et al. (2019) who point out that entrepreneurs We also suggest that the abundance of financial se- create more social value with their ventures when they curity and provision of social and financial support are not only empowered institutionally (e.g., institutions could also motivate entrepreneurs in their middle protect political, and social freedoms) but also existen- ages to create more social value. Public sector expen- tially (e.g., having resources) and psychologically (e.g., diture has been found to be positively linked with a culture gives priority to autonomy, equality, and partic- country’s level of social entrepreneurial activity ipation). Our study supports the presence of a triad of (Hoogendoorn 2016). economy, culture, and institutions by showing that all Our results are also relevant for potential entrepre- three components moderate the relationship between neurs. Empirical evidence shows that structural changes entrepreneurs’ age and their social value creation goals in the economy of developed countries—including de- in a predictable way. In view of these results, we can clining traditional labor markets, the impact of new conclude that all those interacting components of mod- technologies, and youth unemployment—are “forcing” ernization, such as (1) institutional freedoms in terms of many young and older individuals to consider self- economic, social, and political freedoms, employment over traditional employment (e.g., (2) socioeconomic development in terms of higher Kautonen et al. 2014; Minolaetal. 2016). To fulfill their levels of incomes, health and education, and (3) an often non-financial motives and goals, younger and emancipative culture that prioritizes autonomy and in- older individuals should acknowledge the existence of dependence and emphasizes self-expression and quality an “alternative” view of entrepreneurshipthat of life over economic and physical security play impor- challanges entrepreneurs to solve environmental and tant moderating roles in the relationship between entre- social challenges and government failures such as in- preneurs’ age and their social value creation goals. equality, poverty, and pollution. Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 449 6.3 Limitations and future research directions value creation are not orthogonal, but rather dimension- al, concepts, which describe entrepreneurs’ activities on Our study is not without limitations, which present a continuum ranging from purely social to purely fertile ground for future research. First, while the GEM commercial. data enables multivariate analyses which increases our Third, as mentioned before, according to lifespan understanding of how the variables are interrelated, its psychology, individuals’ goals and motives are not al- cross-sectional nature, however, can only allow us to ways linked to age, but rather to an individual’s percep- provide information about age group differences or tion of his/her time remaining; as proposed by inter-individual differences rather than providing infor- Carstensen (2006,p. 1913), “because goal-directed be- mation about intra-individual age change. Although havior relies inherently on perceived future time, the cross-sectional designs like ours are very common in perception of time is inextricably linked to goal selec- lifespan developmental psychology studies (see tion and goal pursuit.” When time is perceived as finite, Schmidt and Teti 2005 and Whitbourne 2019 for two e.g., due to major life events such as illnesses, war, or reviews), longitudinal studies would be preferable to geographical relocation, associated opportunities are al- provide the ultimate evidence on the effect of entrepre- so affected, potentially causing personal goal shifts neurs’ age changes on social value creation across time. (Carstensen 2006; Lang and Carstensen 2002). Previous More importantly, our cross-sectional design does not research indicates that when manipulating or controlling fully allow us to determine conclusively whether the U- for people’s time perspective, there are diminished age shaped relationship between entrepreneurs’ age and so- differences regarding motivations (Carstensen 2006; cial value creation are due to true aging effects, cohort Gielnik et al. 2012; Lang and Carstensen 2002;Zacher effects, or period effects (Mackenzie et al. 2018). De- and Frese 2009). Thus, future research should control for individuals spite these limitations, we still believe that what we ’ subjective sense of their perceived time observe are age effects rather than cohort effects for constraints. two reasons. First, the U-shaped relationship is still Fourth, our focus on formal institutional quality, present when controlling for cohort effects (see measured by a country’s level of economic, political, Table 6). Despite our belief that aging effects, rather and social freedom is just one plausible moderating than cohort effects, drive our results, further research is mechanism in the age-social value creation relationship. needed to test relationships using different study de- In line with our auxiliary analysis, future research signs; yet, we acknowledge the challenges associated should investigate if and how additional informal insti- with the implementation of a longitudinal design that tutions such as a country’s trust level or social identity enables to follow individuals throughout their whole influence the relationship between age and social value lifespan as well as the limitations of longitudinal designs creation (e.g., Brieger 2019; Pathak and Muralidharan in lifespan developmental psychology studies (see 2016; Stephan et al. 2015). With respect to recent in- Schmidt and Teti 2005). sights concerning the interplay of gender and informal Second, our study captures entrepreneurs’ perceived institutions (Brieger et al. 2019; Hechavarría et al. value creation rather than actual value creation. Future 2017), it wouldalsobeinterestingtoexamineage research could explore whether more objective mea- patterns in the relationships between gender, culture, sures of such variable would yield to similar results. and value creation goals. An additional limitation refers to an individual’sunder- Finally, the high correlation between formal institu- standing of social and economic value creation. While tional quality and economic development stage could one may think of extreme cases of commercial entre- lead to the assumption that not primarily well- preneurship where founders solely aim to achieve finan- functioning institutions, but rather the abundance of cial provision and asset generation on the one side or material security, moderates the age-social value crea- pursue purely philanthropic business models on the tion linkage. If material security is certain, entrepreneurs other side, this is mostly not the case. Even at these may prioritize values that are more prevalent in the extreme points, there are still aspects of both. That is, respective life phase. We find that GDP per capita does social value creation also relies on economic realities not reinforce the negative linkage between age and just as economic-oriented businesses generate social social value creation goals, but it moderates the positive value (Austin et al. 2006). 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Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study

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Small Bus Econ (2021) 57:425–453 https://doi.org/10.1007/s11187-020-00317-z Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study Steven A. Brieger & Anne Bäro & Giuseppe Criaco & Siri A. Terjesen Accepted: 9 January 2020 / Published online: 24 January 2020 The Author(s) 2020 Abstract This study explores the relationship be- and their choice to pursue social value creation as tween an entrepreneur's age and his/her social value supportive institutional environments allow entrepre- creation goals. Building on the lifespan developmen- neurs to follow their age-based preferences. We con- tal psychology literature and institutional theory, we firm our predictions using multilevel mixed-effects hypothesize a U-shaped relationship between entre- linear regressions on a sample of over 15,000 entre- preneurs’ age and their choice to create social value preneurs (aged between 18 and 64 years) in 45 coun- through their ventures, such that younger and older tries from Global Entrepreneurship Monitor data. The entrepreneurs create more social value with their findings are robust to several alternative specifica- businesses while middle age entrepreneurs are rela- tions. Based on our findings, we discuss implications tively more economically and less socially oriented for theory and practice, and we propose future re- with their ventures. We further hypothesize that the search directions. quality of a country’s formal institutions in terms of economic, social, and political freedom steepen the . . . Keywords Age Lifespan psychology Social value U-shaped relationship between entrepreneurs’ age . . Social entrepreneurship Entrepreneurship Formal institutions S. A. Brieger (*) University of Sussex Business School, University of Sussex, . . . . . Brighton, UK JEL classifications L26 L31 Q01 P48 M14 M16 e-mail: s.a.brieger@sussex.ac.uk A. Bäro Dr. Arend Oetker Chair of Business Psychology and Leadership, 1 Introduction HHL Leipzig Graduate School of Management, Leipzig, Germany e-mail: anne.baero@hhl.de Individuals’ orientation towards entrepreneurial activi- G. Criaco ties differs depending on where they stand in their Rotterdam School of Management, Erasmus University, lifespans (Gielnik et al. 2012; Kautonen et al. 2017; Rotterdam, The Netherlands Lévesque and Minniti 2006; Parker 2009). Prior re- e-mail: criaco@rsm.nl search provides strong empirical support for an inverted S. A. Terjesen U-shaped relationship between individuals’ age and College of Business, Florida Atlantic University, Florida, USA their entrepreneurial motivations, intentions, and behav- e-mail: sterjesen@fau.edu iors, showing that middle-aged individuals are typically S. A. Terjesen more likely to engage, or show an interest, in entrepre- Norwegian School of Economics, Bergen, Norway neurship (Bönte et al. 2009; Curran and Blackburn 426 S. A. Brieger et al. 2001; Funken and Gielnik 2015; Lévesque and Minniti goals seek to improve society by contributing towards 2006;Minolaet al. 2016; Parker 2009). basic needs fulfillment and well-being, positive Although existing research offers important in- health, and a healthy environment (De Ruysscher sights on the relationship between individuals’ age et al. 2017). Drawing on lifespan developmental psy- and their entrepreneurial behavior, we know little chology (Baltes et al. 2006; Ebner et al. 2006), we about which types of goals (i.e. social, economic, or argue that entrepreneurs’ priorities for social (versus environmental) entrepreneurs pursue in different life economic) objectives differ over the stages of their stages through their organizations. This knowledge lifetimes. More precisely, we hypothesize a U-shaped gap is surprising given that previous research in the relationship between an entrepreneur’s age and his/her social sciences identifies significant age differences willingness to create social value. We propose that the in people’s attitudes, values, intentions, and behav- focus on social value creation decreases with increas- iors. For instance, lifespan developmental psycholo- ing age throughout early middle adulthood, during gy argues that people’s goals and motives differ de- which entrepreneurs are more likely to prioritize per- pending on their lifespan stage (Baltes et al. 2006; sonal welfare and economic motives over social mo- Ebner et al. 2006). This perspective suggests that tives, and later increases again during late middle while younger people look for value recognition, adulthood. Accordingly, compared with middle-aged social acceptance, and social embeddedness, people entrepreneurs, younger and older entrepreneurs are in middle adulthood instead prioritize growth and more likely to prioritize social goals, which contribute maintenance, and older adults typically show higher to the wealth of their communities and societies. levels of conscientiousness (Carstensen 2006;Lang Moreover, we look at the role that formal institutions and Carstensen 2002;Robertsetal. 2006). Political play in modifying this relationship since institutions science research presents evidence for enduring birth are believed to regulate individuals’ behavior through cohort effects by showing that younger people give binding political, economic, and contractual rules more priority to postmaterialist values (self- (North 1990). We argue that a country’s institutional expression and quality of life) than materialistic quality moderates the curvilinear relationship be- values (economic and physical security) compared tween entrepreneurs’ age and social value creation, with their older counterparts (Inglehart 1997; such that better institutional quality steepens the U- Inglehart and Welzel 2005). People shift their values shaped relationship between entrepreneurs’ age and from materialist to postmaterialist once they experi- their choice to pursue social value creation through ence conditions free of economic and physical inse- their organizations; this is because supportive, well- curities. As, on average, younger cohorts grew up in designed institutional environments help entrepre- safer and more prosperous conditions than their older neurs to follow their preferences. counterparts, young people are more postmaterialist We find support for our predictions in a sample of which is linked with a rising sense for human auton- more than 15,000 entrepreneurs from 45 countries. Our omy, tolerance, trust, and equality (Inglehart 1997; study makes three key contributions. First, we contrib- Inglehart and Welzel 2005). ute to the role of individuals’ age in entrepreneurship In this study, we explore the relationship between research by moving beyond the effect of individuals’ entrepreneurs’ age and their social value creation age on “conventional” entrepreneurial motivation and goals by examining cross-sectional age differences entry (see e.g., Bönte et al. 2009; Curran and Blackburn in entrepreneurs’ choice to create social value through 2001; Levesque and Minniti 2006; Minola et al. 2016) their ventures. Social value creation is “defined to consider the goals these individuals pursue via their broadly as that which enhances well-being for the organizations. Our results show a U-shaped relationship earth and its living organism” (Brickson 2007,p. between entrepreneurs’ age and their willingness to contribute to the welfare of their communities and soci- 866). Entrepreneurs who follow social value creation eties, complementing the “classic” view of an inverted U-shaped relationship between individuals’ age and Notably, the focus of this study is not on social entrepreneurs or the entrepreneurship. Second, our study advances and ex- creation of social enterprises, but rather on how any entrepreneur might tends the current discourse on (multiple) value creation create social value, in addition to economic or other forms of value creation, in his/her business endeavors, depending on his/her age. goals in entrepreneurship by showing that economic and Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 427 social goals display different age patterns across entre- creates economic and social value creation, illustrating preneurs’ lifespan (Brieger and De Clercq 2019; that commercial and social orientation is not a binary Hechavarría et al. 2017; Hörisch et al. 2017, 2019). choice, but rather a matter of varying degrees. Third, we show that the quality of the institutional Since entrepreneurs who also create social value with environment where entrepreneurs operate moderates their ventures can play vital roles in alleviating social the relationship between entrepreneurs’ age and entre- problems, protecting the environment, and enhancing preneurial value creation goals. By linking lifespan de- their societies’ well-being and social cohesion, ques- velopmental psychology and institutional theory, we tions arise concerning the drivers of social value crea- provide a deeper understanding of when entrepreneurs tion. Recent research identifies both individual (e.g., prioritize social over economic objectives throughout gender, education, income) and contextual (e.g., wealth, their lifespans and across institutional conditions. Even culture, institutions) characteristics, as well as their in- if the cross-sectional design of our study does not allow terplay, as important determinants of entrepreneurs’ so- to draw any conclusion as to whether entrepreneurs cial value creation (Brieger and De Clercq 2019; Brieger change their value creation goals over their lifespan, et al. 2019; Hechavarría et al. 2017; Terjesen 2017). The our results provide initial evidence that entrepreneurs burgeoning literature is unclear as to whether there are in different age groups pursue different social value age-related patterns in the extent to which entrepreneurs creation goals through their businesses. create social value. 2.2 Lifespan Developmental Psychology 2 Theoretical background Lifespan developmental psychology focuses on human beings’ development of psychological functioning over 2.1 Entrepreneurship and social value creation their life courses (Baltes 1987;Baltes et al. 2006), and An increasing number of entrepreneurs prioritize social posits that human life is a continuous development, and value creation. By following not only commercial but no age period dominates. The normative regularities in also social objectives in doing business, entrepreneurs age groups (Kanfer and Ackerman 2004) suggest that seek to contribute to the natural (e.g., clean and healthy individuals at every life stage have the potential to environment) and social (e.g., relatedness, social cohe- change and grow (Baltes et al. 2006). Erikson’s(1959, sion, and security) resource endowment, and sometimes 1994) stage model of lifespan psychological develop- forgo their own advantages (e.g., in the form of higher ment postulates that adult development is epitomized by incomes) in the interest of the common good and wel- major challenges resulting from biological and cultural fare of their societies (Brieger and De Clercq 2019; imperatives which, in turn, impinge on people’ssocial Dacin et al. 2010; Terjesen 2017). life (Srivastava et al. 2003) and systematically affect Typically, entrepreneurs create both social and eco- people’s goals over their lifespans (Carstensen et al. nomic value at the same time. Economic and social 1999). value creation can complement each other, such as when Career development follows a normative path from an organization’s profits are used to provide goods and birth to late adulthood (e.g., Super 1980) with three services that meet social needs, i.e., philanthropic and distinct lifespan phases: young, middle, and late adult- charitable activities. For instance, Microsoft has created hood each associated with specific developmental tasks. enormous social impact, even if social value creation Individuals who successfully master these tasks can was never its primary goal (Acs et al. 2013). More than move to the next life phase (Kanfer and Ackerman one billion computers around the world use Microsoft’s 2004). According to lifespan psychology, young adult- software for business and home applications, thereby hood is a period of exploration and establishment char- improving the skills and opportunities of millions of acterized by a search for identity (Erikson 1994). Young people (Acs et al. 2013). Another example is the start- adults focus on social relations and peers while devel- up company Celise that produces corn starch–based oping their own identities. Moreover, young adults usu- straws, lids, utensils, and other products that address ally live in financially secure circumstances, due to a people’s needs for biodegradable and compostable prod- close affiliation to their parental home. Hence, young ucts. Celise founder Cameron Ross simultaneously adults pursue their individual life plans based on 428 S. A. Brieger et al. personal values and preferences, rather than focusing on meaningful goals in order to gain personal satisfaction mere economic objectives. Individuals develop their (Kooij et al. 2011;Lang and Carstensen 2002). objectives according to how much time they perceive Before discussing how entrepreneurs’ age may relate that they have left (Carstensen 1995). As young adults to social value creation under a lifespan psychology perceive time as open-ended, they prioritize goals aimed perspective, it is important to clarify the boundaries of at improving the world and “this also includes goals our study. Historically, lifespan developmental psychol- related to the task of finding out about one’srole in the ogy applies both cross-sectional and longitudinal de- society (e.g., receiving social acceptance)” (Lang and signs to study age effects, across a wide range of disci- Carstensen 2002, p. 125). This unconditional orientation plines such as business and social psychology, organi- towards social relations is also supported by previous zational behavior, and entrepreneurship (Allemand et al. research on lifespan developmental changes, suggesting 2007; Katzetal. 2019; Mackenzie et al. 2018;Nurmi that younger individuals particularly value recognition, 1989). Key to the understanding study design in lifespan social embeddedness, and affiliation to a social group, developmental psychology are the concepts of age, co- such as peers or the community they live in, while hort, and period effects, and their underlying differences forming their own social identities (e.g., Lang and (Schaie 1965). Cross-sectional designs helps to under- Carstensen 2002). stand variations among people who are in different Middle adulthood is a period of growth and mainte- stages of their life (Mackenzie et al. 2018; Salmela- nance. In middle adulthood, individuals direct their Aro and Upadyaya 2018). As summarized by Schmidt responsibilities towards supporting their own family, and Teti (2005,p.5), “this research approach stems from providing a home, raising offspring, and caring for the assumption that when an older age group is drawn elderly (Schaie 2016). The middle-aged adult falters from the same population as a younger age group, the between generativity, i.e., raising own children and thus eventual behavior of the younger group can be predicted guiding the next generation, and stagnation, i.e., earning from the behavior of the older group (Achenbach 1978). money, generating wealth, and being self-centered. Due Thus, a researcher can examine the relationship between to heavy financial obligations, parenthood burdens, and earlier and later behavior without actually waiting for high demands for family support, middle-aged adults development to occur (Achenbach 1978).” Importantly, are forcedtofoster goals and pursueanoccupationthat such cross-sectional age differences do not permit infer- successfully manages these life stage challenges ences about intra-individual changes and differences (Levinson 1986; Warr 2008). over time, but rather provide information about age Finally, late adulthood is a period of increasing con- changes or inter-individual differences in intra- scientiousness (Roberts et al. 2006) where individuals individual change. A limitation of these studies is that tend to critically evaluate their achievements in life and their external validity (i.e., generalizability) is possibly question their ability to make realizable improvements affected by historical and cultural differences between (Erikson 1994). Lifespan research suggests that per- cohorts, i.e., cohort effects. However, lifespan psychol- ceived future time left, and with it remaining opportu- ogy highlights that cross-sectional designs are beneficial nities, also predicts cognitive, emotional, and motiva- in that period effects are less likely to influence age tional changes potentially causing personal goal shifts differences (Ebner et al. 2006; Lindenberger and (Carstensen 2006; Lang and Carstensen 2002). Older Baltes 1997). Longitudinal designs are advantageous people oftentimes realize that their time is limited, and in allowing “direct inferences about intra-individual shift their priorities from their own career advancement change and inter-individual differences in intra- to greater generativity, i.e., assuming responsibility for individual change” (Lindenberger and Baltes 1997,p. the current young generation, sharing knowledge and 430). However, they are often also susceptible to a experiences, and giving something back to society after (single) cohort effect since the particular cohort under a rewarding professional career (Clegg and Fifer 2014; investigation may possess some unique characteristics Funken and Gielnik 2015; Kooij et al. 2011;Lang and or experience some unusual event that makes it unlike Carstensen 2002; Zacher et al. 2012). Consequently, another cohort of the same age (Schmidt and Teti 2005); growth motives play a subordinate role in late adulthood this, in turn, might impact the internal and external compared to middle adulthood (Kooij et al. 2011). Also, validity. Moreover, the validity of a simple longitudinal with increasing age, individuals prioritize emotionally research study can be threatened by the age at the time of Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 429 measurement (Schmidt and Teti 2005); this threat is societies’ welfare. Young entrepreneurs often receive most likely to impact such studies because it consists (economic) support from their family and community. of only one cohort and thus makes it impossible to Under conditions of financial security, young entrepre- separate out the independent effects of age and time of neurs’ basic needs are often met which can increase their measurement. In line with previous studies (Ebner et al. motivation to help others and therefore prioritize social 2006; Minolaetal. 2016; Nurmi 1989; Wiernik et al. value creation when structuring and running ventures. 2013), we apply lifespan developmental psychology in a As such, entrepreneurs in young adulthood are more cross-sectional design to study the implications of age inclined to follow their own life plans based on personal differences for social value creation at the present point values and preferences, and are less likely to focus on in time; we are interested in investigating age group commercial goals. Moreover, young entrepreneurs usu- differences in entrepreneurs’ social creation goals. Ac- ally perceive time as open-ended and therefore prioritize cordingly, we do not investigate how social value crea- world-improving goals. These preferences are illustrat- tion change as entrepreneurs mature (cf., Wiernik et al. ed by a famous quote attributed to Winston Churchill: 2013). “If a man is not a socialist by the time he is 20, he has no heart. If he is not a conservative by the time he is 40, he has no brain.” Previous research on entrepreneurial in- 3 Hypotheses tentions supports this notion, suggesting that compared to older counterparts, younger individuals are more 3.1 Entrepreneurs’ age and social value creation socially oriented, showed by higher engagement in so- cial entrepreneurship compared to older individuals We argue that entrepreneurs’ individual attitudes, goals, (Lepoutre et al. 2013; Stephan et al. 2015; Terjesen desires, and values differ depending on their age; such et al. 2016, Terjesen 2017). differences, in turn, are reflected in their businesses’ Addressing social goals, beyond mere economic varied value creation goals. This argument is in line goals, should also be more common for entrepreneurs with research on the micro-foundations of organization- in late adulthood when family and career obligations are al goals suggesting that “an organization’s goals may be usually less extensive and prominent (Kautonen et al. largely set by and reflect the interests, knowledge, and 2017). For instance, career development research sug- contingencies of a dominant coalition often located at gests that older entrepreneurs have usually already the levels of senior management, the organization’s achieved their major career goals resulting in a satisfac- founders, and/or its owners” (Linder and Foss 2018,p. tory income level (Gielnik et al. 2012). Hence, older 49). individuals consider entrepreneurial activities only as an Since priorities shift with age, entrepreneurs’ willing- additional source of income, not as a “principal wealth generator” (Heimonen 2013, p. 55). Older entrepreneurs ness to create economic or non-economic social value with their entrepreneurial activities should depend on can thus concentrate on goals related to societal well- their life stages. We hypothesize that entrepreneurs in being and a healthy environment. In addition, older middle adulthood will prioritize personal growth and adults typically show higher levels of conscientiousness. establishment (cf. Minola et al. 2016). As middle-aged Prior research on adult development and value transi- adults focus on growth-oriented goals regarding all tions emphasizes that when individuals go from midlife kinds of life topics and must handle greater financial to old age, their value orientation shifts from “instru- obligations to their families (Ebner et al. 2006), middle- mental” (such as financial security) to “terminal” values aged entrepreneurs will focus more on preventing finan- (such as the desire for world peace) (Ryff and Baltes cial insecurity, generating wealth, and maximizing 1976; as cited by Kanfer and Ackerman 2004). Numer- profits and growth, thereby pursuing economic goals ous studies suggest that older individuals place less with their businesses (cf. Warr 2008). Accordingly, priority on financial gains and personal wealth middle-aged entrepreneurs will prioritize economic con- (Heimonen 2013; Singh and DeNoble 2003;Warr siderations in doing business. 2008), and instead prioritize recognition, social On the other hand, entrepreneurs in young and late embeddedness, and affiliation to a community (Lang adulthood may display a higher willingness to pursue and Carstensen 2002). Extending these arguments to social objectives to contribute to their communities and the realm of entrepreneurship, we expect that older 430 S. A. Brieger et al. entrepreneurs will prioritize social value creation goals realized freedoms of movement of labor and goods, more over economic ones than middle-aged entrepre- freedom to invest), political freedoms (e.g., guaranteed neurs. Taken together, we hypothesize a curvilinear free and fair elections, transparent, predictable, and ac- relationship between entrepreneurs’ age and their social countable governance, policymaking and administra- goals: tion, and absence of corruption), and social freedoms (e.g., equality before the law, equal access to resources, Hypothesis 1: There is a U-shaped relationship and freedom of institutional discrimination) (De Haan between an entrepreneur’s age and his/her social and Sturm 2003;House 2014; Sigman and Lindberg value creation. 2019). Societies with high-quality institutions guarantee these types of freedoms and thus provide the ideal environment for entrepreneurs to start and grow a suc- 3.2 Entrepreneurs’ age and social value creation: cessful business. As such, formal institutional quality is the moderating role of institutional quality often proposed as a key driver for entrepreneurship (e.g., Estrin et al. 2013a; Goltz et al. 2015). Economic, polit- Institutions are defined as “persistent and connected sets ical, and social freedoms create economic opportunities of rules (formal and informal) that prescribe behavioral and help entrepreneurs to mobilize crucial resources, roles, constrain activity, and shape expectations” providing them with the voice and choice to make (Keohane 1989, p. 3) and can be distinguished as formal autonomous economic decisions, and guaranteeing en- institutions, which include rules and laws, and as infor- trepreneurs equal access to resources as well as equality mal institutions such as values, norms, and codes of before the law. Such favorable conditions typically re- conduct (North 1990). Formal and informal institutions duce transaction costs of entrepreneurial activity, i.e., play a critical role in shaping entrepreneurial activity cheap and less time-consuming entry regulations reduce (Autio et al. 2013; Bowen and De Clercq 2008;De barriers to new firm creation (Djankov et al. 2002; Clercq et al. 2014; Goltz et al. 2015;McMullen et al. Klapper et al. 2006). High-quality institutions also en- 2008). In addition to a direct influence, formal and able and help financial institutions and other service informal institutions indirectly affect entrepreneurship providers to develop, thereby facilitating entrepreneurs’ by moderating relationships between individual charac- access to capital and resources for scaling their entre- teristics (e.g., gender, income, education, social capital) preneurial initiatives (Estrin et al. 2013a). As a conse- and entrepreneurial intentions and actions (Brieger and quence, greater levels of entrepreneurial activity are De Clercq 2019;DeClercq etal. 2013, 2014; Pathak typically found in contexts characterized by less regula- and Muralidharan 2016; Wennberg et al. 2013). tion of credit and labor, lower levels of corruption, and a This study expands this literature by focusing on smaller government sector (Aidis et al. 2012;Nyström 2008; van Stel et al. 2007). formal institutions and how the quality of formal insti- tutions moderates the relationship between an entrepre- We hypothesize that institutional quality moderates neur’s age and his/her choice to create social value with the curvilinear relationship between entrepreneurs’ age his/her venture. While we do not believe that informal and their social value creation goals in doing business. institutions or even socioeconomic development play High-quality institutions provide entrepreneurs with the subordinate roles compared to formal institutions in liberty, security, capabilities, and accountability to set the relationship between entrepreneurs’ age and social goals in accordance with those associated with their value creation, we focus on formal institutions previous- position in the life phase (see hypothesis 1 above). ly shown as instrumental to understanding social entre- When embedded in an environment with strong and preneurial activity (Estrin et al. 2013a, b, 2016; well-designed institutions, middle-aged entrepreneurs Sahasranamam and Nandakumar 2018; Stephan et al. may feel more comfortable that they will be able to 2015). Moreover, previous research highlights that harvest the economic fruits of their efforts and initia- high-quality formal institutions are usually associated tives. High-quality institutions should empower entre- with certain cultural characteristics and socioeconomic preneurs in their ambitions to initiate or accelerate their development (Inglehart and Welzel 2005; Welzel 2013). business’ transformations. Investments and hard work Formal institutional quality is linked to guaranteed are required to achieve economic profits. In strong in- economic freedoms (e.g., property ownership, fully stitutional environments, entrepreneurs also know that Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 431 their entrepreneurial plans and actions are more predict- businesses. Low institutional quality also limits entre- able and less susceptible to external influences, thereby preneurs’ willingness to pursue economic goals in increasing feelings of control over financial risks and middle adulthood despite middle-aged entrepreneurs returns (Estrin et al. 2013a;Harper 2003;McMullen actually prefer to be economically oriented with their et al. 2008). Favorable access to resource endowments, venture in this life phase. This is because low institu- distributed power, equality, security, and accountability tional quality increases transaction costs, which in turn should motivate middle-aged entrepreneurs to realize may reduce financial rewards. Threats due to missing higher economic goals, while empowering younger property rights, poor law enforcement, heavy bureau- and older entrepreneurs to follow their non- cratic burdens, corruption, and unequal access to re- commercial goals to a larger extent. In environments sources or inequality before the law should reduce where people have a political voice and freedom to entrepreneurs’ willingness to pursue economic goals express themselves, where governments and adminis- in middle adulthood. Hence, while well-functioning trations are accountable and transparent, and economic institutions allow entrepreneurs to follow their innate and political institutions provide resources that create a orientations (whatever that would be), weak institu- sense of safety and security, entrepreneurs of younger tions limit them. Taken together, we hypothesize: and older ages should be more empowered to follow their stronger prosocial intentions. To conclude, under a Hypothesis 2: A country’s institutional quality strengthens the U-shaped relationship between stronger institutional context, middle-aged entrepre- an entrepreneur’s age and his/her social value neurs should be able to better realize their innate orien- creation. tation towards achievement, wealth, and financial secu- rity, resulting in lower social value creation. Conversely, Figures 1 and 2 summarize and visually illustrate our in such institutional settings, entrepreneurs in early and two hypotheses. late adulthood should be better able to realize their innate orientation towards world-improving goals and giving back to society, respectively. Given the above, under a stronger institutional context, the U-shaped 4Methodology relationship between entrepreneurs’ age and social value creation should be steepened. 4.1 Sample On the other hand, we expect the U-shaped relation- ship between entrepreneurs’ age and their social objec- We utilize the Global Entrepreneurship Monitor’s tives to flatten in contexts marked by weaker institu- (GEM) Adult Population Survey (APS), the largest tions. Weak institutional settings limit entrepreneurs’ multi-country research project on entrepreneurship pro- decision making towards varying value creation goals. viding individual and country-level harmonized data on Weak institutional environments demand entrepre- entrepreneurial attitudes, intentions, and efforts in over neurs who prioritize social value creation to fill insti- 100 countries (Bergmann and Stephan 2013;Hörisch tutional voids, but cannot provide the sufficient re- et al. 2017, 2019;Reynolds et al. 2004). In 2009, GEM sources that entrepreneurs need to pursue non- included a special topic on commercial, social, and commercial goals. Contexts with weak economic, po- environmental entrepreneurial activity. Entrepreneurs litical, and social freedoms tend to be economically in more than 50 countries answered questions related poorer and more collectivistic, thus motivating entre- to their business objectives, and the responses provide preneurs to focus primarily on the welfare of their in- the basis for our dependent variable. GEM follows a group and not of the wider society or all humanity. So, cross-sectional design, and is therefore most powerful even if entrepreneurs in young and late adulthood when combined with other data using multilevel re- would like to create social value to a larger extent, search methodology (Bergmann and Stephan 2013; they are unable to do so. In line with this, Brieger Bosma 2013). We incorporate macro-level data from et al. (2019) argue that entrepreneurs who are the World Bank and Freedom House. Our sample rep- empowered existentially, psychologically, and institu- resents each country’s adult working population (18– tionally tend to be more enabled, motivated, and enti- 64 years). In line with previous research, the sample is tled to pursue broader social goals with their weighted to each country’s census adult labor force 432 S. A. Brieger et al. Fig. 1 Relation between entrepreneurs’ age and social value creation (Hypothesis 1) (Hechavarría et al. 2017). Since the World Bank does points allocated to the two types of non-economic busi- not provide information for all countries in GEM ness goals, and label the variable “social value creation.” (Lepoutre et al. 2013; Terjesen et al. 2012), our final Previous research on social and environmental value sample comprises data from 15,339 entrepreneurs in 45 creation, which used the same items, finds that various countries. The countries represent all regions around the individual-level (e.g., gender, education, and income) world ranging from less developed to highly developed and country-level characteristics (e.g., wealth and countries. emancipative values) influence entrepreneurs’ non- commercial orientations (Brieger and De Clercq 2019; 4.2 Measures Brieger et al. 2019; Hechavarría et al. 2017;Hörisch et al. 2017, 2019). Dependent variable Our dependent variable captures the degrees to which an entrepreneur prioritizes social Independent variable Our independent variable is each value creation in doing business with the statement: entrepreneur’s age measured as a continuum from 18 to “Organizations may have goals according to the ability 64. We include the quadratic term of age (age squared) to generate economic value, societal value, and environ- to test for curvilinear effects. Research shows that age plays an important role for people’s “conventional” mental value. Please allocate a total of 100 points across these three categories as it pertains to your [venture’s] entrepreneurial motivation and entry (Bönte et al. goals.” Since the measure is ipsative and social value 2009; Levesque and Minniti 2006; Minola et al. 2016). creation includes both societal well-being and environ- For instance, Minola et al. (2016) find evidence for mental health (Brickson 2007; Mair and Marti 2006; curvilinear lifespan patterns in entrepreneurial desirabil- Dacin et al. 2010, 2011), we use the additive score of ity and feasibility beliefs. Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 433 Fig. 2 Relation between entrepreneurs’ age, institutional quality, and social value creation (Hypothesis 2) Moderating variables Institutional quality is measured (2016) show a positive influence of rule of law on social by three components: (1) economic freedom, (2) polit- entrepreneurial activity. ical freedom, and (3) social freedom. Economic freedom Political freedom combines two Freedom House captures each entrepreneur’scountry’sformalinstitu- measures of liberty: civil liberty and political rights. tional quality with Heritage’s Index of Economic Free- Civil liberty encompasses the freedom of the press, the dom (IEF). IEF measures 12 specific components of rights of people to assemble, hold alternative political economic freedom, scaled from 0 to 100: property and religious views, receive a fair trial, and express their rights, judicial effectiveness, government integrity, tax views without fear of physical retaliation. Political rights burden, government spending, fiscal health, business include free and fair elections, the ability to form polit- freedom, labor freedom, monetary freedom, trade free- ical parties, and popular sovereignty. The scores of both dom, investment freedom, and financial freedom. The scales range from 1 (greatest degree of freedom) to 7 index weights each category equally and averages them (smallest degree of freedom). We rescaled both mea- to produce an overall economic freedom score (for a sures according to the country’s highest degree of free- detailed description see Miller et al. 2018). We normal- dom and then normalized the scales from 0 for least ized the index into a scale ranging from 0 (least eco- political freedom to 1 for most political freedom. Final- ly, we averaged both scales to one political freedom nomic freedom) to 1 (most economic freedom). Nyström (2008) shows that economic freedom positive- index. Data are from the year 2008. Past research finds ly relates to “conventional” entrepreneurship, and a positive relationship between civic entitlements in McMullen et al. (2008) find a positive association of form of autonomy rights and political participation property rights and opportunity-driven entrepreneurial rights and social value creation in entrepreneurship activity. Both Estrin et al. (2013b) and Hoogendoorn (Brieger et al. 2019). Sahasranamam and Nandakumar 434 S. A. Brieger et al. (2018) also show that political institutions positively At the country level, we control for GDP per capita, moderate the positive effect of individual human capital GDP growth, and unemployment. Hoogendoorn (2016) and financial capital on social entrepreneurship. and Brieger and De Clercq (2019) provide evidence for Social freedom is a combined index based on V- a positive relationship between GDP and socially ori- Dem’s egalitarian component index and V-Dem’sequal- ented entrepreneurial activity. Several countries also ity before the law and individual liberty index, and thus include GDP growth and unemployment as controls, measures a country’s degree of equality before the law, but both variables are mostly insignificantly related to individual liberty, equal distribution of resources and socially oriented entrepreneurial activity (Brieger et al. power, and equal protection of rights. We averaged both 2019;Estrinetal. 2013b). scales, which range from 0 for weak social freedom to 1 for strong social freedom. The V-Dem data are from the 4.3 Data analysis year 2008. The role of social freedom for entrepreneurial activity has not yet been explored. However, Pathak and We test our hypotheses with multilevel mixed-effects Muralidharan (2018) recently show that income in- linear regression. Our dataset’s nested nature (individ- equality increases people’s likelihood to be engaged in uals nested in countries) renders multilevel modeling social entrepreneurship, while income mobility de- preferable to traditional regression techniques which creases it. tend to generate inefficient estimates and biased stan- dard errors (Snijders and Bosker 2012). To determine Control variables Consistent with previous GEM re- the need for multilevel modeling, we estimated the search, we include individual and country-level control between-country variance of the dependent variables. variables. At the individual level, we control for indi- We run an intercept-only model for our dependent var- viduals’ gender, household income, education, house- iable and calculate an intraclass correlation coefficient hold size, personal trait characteristics such as having (ICC; the percentage of total variance in the respective start-up skills or fearing failure, and if the respondent dependent variable that exists between countries). We knows an entrepreneur. Female gender is significantly find that about 14.5% of social value creation variations associated with social value creation in doing business lie between countries. ICCs are considered small, medi- (Brieger et al. 2019; Hechavarría et al. 2017). Several um, and large at 0.05, 0.10, and 0.15 respectively (Hox studies document that education positively relates to 2010). Hence, the results indicate that there is enough socially oriented entrepreneurial activity (Brieger and between-country variance to warrant a multilevel ap- De Clercq 2019; Brieger et al. 2019;Estrinetal. proach. We use Stata 15’s “mixed” command to conduct 2013b, 2016; Pathak and Muralidharan 2016;Stephan the multilevel linear regression. For our interaction et al. 2015). Prior studies report mixed results for house- models, we specify a multilevel linear regression with hold income. Brieger and De Clercq (2019)document a random intercept and a random slope for the age that household income is negatively associated with variable (Table 1). entrepreneurs’ social value creation goals. On the con- trary, Pathak and Muralidharan (2016)and Sahasranamam and Nandakumar (2018) report a posi- 5Results tive relationship of household income and social entre- preneurship. Household size is negatively linked to 5.1 Main results entrepreneurs’ social value creation (Brieger and De Clercq 2019; Brieger et al. 2019). Start-up skills Table 2 depicts our variables’ descriptive statistics. On (Pathak and Muralidharan 2016; Sahasranamam and average, entrepreneurs give much less priority to social Nandakumar 2018), fear of failure (Estrin et al. value (M = 35.94, SD = 25.59) than economic value 2013b), and knowing another entrepreneur (Estrin creation. The entrepreneurs’ average age is 41 years et al. 2013b; Sahasranamam and Nandakumar 2018) (SD = 11.72), and 37% of the participants are female. are positively related to social entrepreneurship. Brieger Nearly 37% of the entrepreneurs have at least post- et al. (2019) report a negative relationship between secondary education (M = 2.05, SD = 1.00), and more entrepreneurs’ fear of failure and level of social value than half are in the upper third household income range creation. (M = 1.42, SD = 0.73). Most entrepreneurs report Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 435 Table 1 Variables description Variable Description Individual-level variables Social value Allocate a total of 100 points across three categories of value creation goals: economic, environment, and social. creation Social value creation is an additive of each entrepreneur’s willingness to create social and environmental value with his or her business. Age Age in years (linear and squared). Gender Female (=1 ; 0 = male). Household income Lowest third (= 0), middle third (= 1), or upper third (= 2) household income distribution in the country of living. Education No educational background (= 0), some secondary education (= 1), secondary education (= 2), post-secondary education (= 3), or graduate experience (= 4). Start-up skills Has the knowledge, skill, and experience to start-up a business (= 1, 0 = otherwise). Fear of failure Would not start a business out of fear of failure (= 1, 0 = otherwise). Knows Knows someone who has started a business in the past 2 years (= 1, 0 = otherwise). entrepreneur Household size One household members (=1) to five and more household members (= 5). Country-level variables GDP p.C. (t-1) Gross domestic product (GDP) per capita (constant 2010 US$). Source: World Bank, 2008 data. GDP growth p.C. GDP growth per capita (annual %). Source: World Bank, 2008 data. (t-1) Unemployment Percentage of unemployed individuals among the working population. Source: World Bank, 2008 data. (t-1) Economic freedom Economic freedom is measured by the Index of Economic Freedom which assesses conditions in the four aspects of (t-1) institutional quality rule of law, government size, regulatory efficiency, and market openness. We normalized the index into a scale range with minimum 0 for least economic freedom and maximum 1 for most economic freedom. Source: Heritage, 2008 data. Political freedom Political freedom is measured by the Freedom House measured of liberty: civil liberty and political rights. The scores (t-1) of both scales range from 1 (greatest degree of freedom) to 7 (smallest degree of freedom). We rescaled both measures according to the country’s highest degree of freedom, and then normalized the scales to 0 for least political freedom to 1 for most political freedom. Finally, we averaged both scales to one political freedom index. Source: Freedom House, 2008 data. Social freedom Social freedom is a combined index based on V-Dem’s (1) egalitarian component index and (2) equality before the (t-1) law and individual liberty index. We averaged both scales, which range from 0 for weak social freedom to 1 for strong social freedom. Source: V-Dem, 2008 data. t-1 indicates lagged variables having the skills to start and run a business (M =0.83, economic freedom (r = 0.13, p < 0.01), political free- SD = 0.37) and less than one third of entrepreneurs dom (r = 0.07, p < 0.01), and social freedom (r = 0.08, indicate a fear of failure (M =0.29, SD =0.45). In addi- p < 0.01). We also find positive significant bivariate tion, more than half of the entrepreneurs report knowing relationships between social value creation and gender other entrepreneurs (M = 0.58, SD = 0.49). The institu- (r = 0.03, p < 0.01), education (r =0.11, p <0.01), tional quality variables economic freedom (M = 0.65, knows entrepreneur (r = 0.02, p < 0.01), and GDP p. SD = 0.10), political freedom (M = 0.74, SD = 0.30), C. (r = 0.15, p < 0.01). Social value creation is nega- and social freedom (M = 0.78, SD = 0.19) indicate a tively related to household income (r = −0.03, good variance in our sample. Table 3 depicts country- p < 0.01), fear of failure (r = − 0.03, p < 0.01), house- level descriptive statistics. hold size (r = − 0.06, p < 0.01), GDP growth p. C. (r = Table 4’s correlation matrix shows no significant − 0.09, p < 0.01), and unemployment (r = − 0.07, bivariate relationship between social value creation p < 0.01). and age (r = 0.01, n.s.), while social value creation is Table 5 contains the results of our multilevel regres- positively associated with the institutional variables sion models: Model 1 examines the controls. Model 2 436 S. A. Brieger et al. explores the direct effect of age on social value creation. significantly moderate the positive relationship between Model 3 adds the quadratic age term to test the curvi- age squared and social value creation. Thus, we can linear effect of age on social value creation. Models 4–6 partially support Hypothesis 2. include the interaction terms. To better understand the nature of the U-shaped Model 1 results show significant associations of relationship between entrepreneurs’ age and social entrepreneurs’ value creation goals and gender, in- value creation, we plot the corresponding graphs. come, education, GDP, and unemployment. Models Figure 3 shows a U-shaped relationship between 2 and 3 report the age effects on social value crea- age and social value creation, indicating that entre- tion. Model 2 reports a significant negative linear preneurs become more economically oriented when age term (β = − 0.095; p < 0.01). Model 3 results they reach middle age and more socially oriented in indicate a U-shaped pattern for the relationship be- young and old age. Entrepreneurs’ creation of social tween age and social value creation. As expected, value decreases with age to a turning point, after the coefficient of the linear term is negative and which social value creation increases again with significant (β = − 0.088; p < 0.01), whereas the coef- rising age. Notably, as we only include entrepre- ficient of the squared term is positive and significant neurs aged 18–64 years, the increase in social value (β =0.006; p < 0.01). The significant U-shaped rela- creation with higher age is limited by the restriction. tionship is stable across all models, supporting Hy- But if we also consider those entrepreneurs who are pothesis 1. older than 64 years old, the graph is even more Models 4–6 include the interaction terms. The results strongly U-shaped as older entrepreneurs tend to show that institutional quality strengthens the U-shaped report high levels of social value creation. structure between age and social value creation. Model 4 Figures 4, 5 and 6 show that the curvilinear relationships are moderated by the institutional qual- results indicate that economic freedom reinforces the negative linkage between age and social value creation ity variables economic freedom, political freedom, (β = − 0.573; p < 0.1) and positively moderates the pos- and social freedom. While strong economic freedom itive association of age squared and social value creation strengthens and thus steepens the U-shaped relation- (β = 0.049; p < 0.01). The results of Models 5 and 6 ship between entrepreneurs’ age and social value indicate that political (β =0.016; p < 0.01) and social creation, weak economic freedom seems to flatten freedom (β = 0.026; p < 0.01) positively and the curve such that the observed curvilinear Table 2 Descriptive statistics Variable N Mean SD Min Max Social value creation 15,339 35.944 25.585 0 100 Gender (female) 15,339 0.369 0.483 0 1 Age 15,339 41.121 11.723 18 64 Household income 15,339 1.416 0.732 0 2 Education 15,339 2.052 1.004 0 4 Start-up skills 15,339 0.833 0.373 0 1 Fear of failure 15,339 0.286 0.452 0 1 Knows entrepreneur 15,339 0.579 0.494 0 1 Household size 15,339 3.470 1.251 1 5 GDP p.C. 45 23,619.120 21,415.090 1237.677 90,806.840 GDP growth p.C. 45 1.844 3.496 − 10.119 10.281 Unemployment 45 7.721 4.523 2.550 23.300 Economic freedom 45 0.648 0.100 0.447 0.897 Political freedom 45 0.744 0.295 0.083 1.000 Social freedom 45 0.781 0.191 0.232 0.983 Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 437 Table 3 Country statistics Country Observations GDP p.C. GDP growth Unemployment Economic Political Social p.C. freedom freedom freedom Algeria 174 4396.76 0.75 11.33 0.56 0.25 0.61 Argentina 271 10,125.26 3.00 7.89 0.54 0.83 0.83 Belgium 191 44,995.29 − 0.05 6.98 0.72 1.00 0.97 Bosnia and 117 4566.88 5.50 23.30 0.54 0.58 0.81 Herzegovina Brazil 498 10,560.24 4.02 7.90 0.56 0.83 0.77 Chile 809 12,486.95 2.16 7.48 0.79 1.00 0.82 China 1022 3805.03 9.09 4.20 0.53 0.08 0.37 Colombia 601 6048.08 2.33 11.42 0.62 0.58 0.58 Croatia 141 14,782.67 2.09 8.53 0.54 0.83 0.88 Denmark 138 60,504.51 − 1.09 3.43 0.79 1.00 0.98 Dominican Republic 411 5120.62 1.79 14.16 0.58 0.83 0.67 Ecuador 591 4624.19 4.57 7.31 0.55 0.67 0.80 Finland 220 49,366.64 0.25 6.37 0.75 1.00 0.97 Germany 456 42,367.62 1.27 7.52 0.71 1.00 0.97 Greece 292 29,876.52 − 0.60 7.76 0.61 0.92 0.93 Hong Kong 41 31,553.63 1.52 3.56 0.90 0.58 0.90 Hungary 248 13,794.42 1.07 7.82 0.68 1.00 0.89 Iceland 245 46,531.31 −0.35 2.95 0.76 1.00 0.94 Iran 376 5914.61 −0.20 10.48 0.45 0.17 0.48 Israel 132 29,930.69 1.24 7.70 0.66 0.92 0.79 Italy 72 37,587.57 −1.70 6.72 0.63 0.92 0.93 Jamaica 443 5150.36 −1.28 10.33 0.66 0.75 0.73 Japan 129 45,165.88 −1.14 3.98 0.73 0.92 0.96 Jordan 261 4073.39 2.76 12.70 0.64 0.33 0.60 Korea 289 20,848.55 2.09 3.16 0.69 0.92 0.91 Latvia 243 13,242.73 −2.59 7.74 0.68 0.92 0.91 Malaysia 130 8991.76 1.55 3.34 0.64 0.50 0.62 Morocco 67 2705.79 4.74 9.57 0.56 0.42 0.60 Netherlands 301 52,121.20 1.30 2.75 0.77 1.00 0.96 Norway 236 90,806.84 −0.86 2.55 0.69 1.00 0.98 Panama 240 7691.55 6.74 5.85 0.65 0.92 0.81 Peru 421 4701.90 7.80 6.64 0.64 0.75 0.65 Romania 38 8872.78 10.28 5.79 0.62 0.83 0.83 Russia 26 11,089.93 5.29 6.32 0.50 0.25 0.60 Saudi Arabia 170 18,465.97 5.75 5.08 0.63 0.08 0.30 Slovenia 368 25,448.94 3.14 4.37 0.60 1.00 0.94 South Africa 141 7465.39 1.79 22.91 0.63 0.83 0.76 Spain 1663 32,304.62 −0.48 11.25 0.69 1.00 0.95 Switzerland 216 75,424.28 0.99 3.35 0.80 1.00 0.97 United Arab Emirates 200 43,045.33 − 10.12 4.01 0.63 0.25 0.60 UK 1473 40,315.57 − 1.41 5.62 0.79 1.00 0.92 USA 357 49,364.64 − 1.23 5.78 0.81 1.00 0.87 Uruguay 246 10,698.08 6.82 7.70 0.68 1.00 0.91 438 S. A. Brieger et al. Table 3 (continued) Country Observations GDP p.C. GDP growth Unemployment Economic Political Social p.C. freedom freedom freedom Venezuela 98 14,687.98 3.61 6.85 0.45 0.50 0.64 Yemen 537 1237.68 0.76 14.97 0.54 0.33 0.23 Mean 340.67 23,619.12 1.84 7.72 0.65 0.74 0.78 relationship becomes more linear, indicating lower 5.2 Robustness checks levels of differences in social value creation among young, middle, and older-aged entrepreneurs. Fig- We run several robustness checks to test the robustness ures 5 and 6 show that the negative effect of entre- of our theorizing and findings. First, because of the preneurs’ age on social value creation does not turn cross-sectional nature of our data, one might criticize to a positive one at higher ages if entrepreneurs live our findings as influenced by differences between dif- in countries that are marked by weak political and ferent birth cohorts or selection effects. For example, social freedoms. In countries with weak political and millennial entrepreneurs might report higher levels of social freedoms, the negative relationship between social value creation because this cohort had more ex- entrepreneurs’ age and social value creation remains posure to environmental and social issues compared to stable, which might be explained by the fact that generation X entrepreneurs. While we cannot complete- older entrepreneurs have to care more for them- ly rule out this possibility in our study, it is worth noting selves and their direct family members when they that baby boomer entrepreneurs (individuals born be- do not have equal rights, equal access to resources tween 1945 and 1964) have similar venture goals as and power, or even miss the opportunities to create compared with the late millennial entrepreneurs (those political and social changes. individuals born 1983 and 1996) despite being closer to Table 4 Correlation matrix 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1. Social value 1 creation 2. Gender (female) 0.03 1 3. Age 0.01 − 0.03 1 4. Household − 0.03 − 0.10 − 0.01 1 income 5. Education 0.11 − 0.02 − 0.05 0.23 1 6. Start-up skills 0.02 − 0.05 − 0.01 0.11 0.12 1 7. Fear of failure − 0.03 0.06 − 0.01 − 0.05 − 0.06 − 0.14 1 8. Knows 0.02 − 0.07 − 0.17 0.11 0.09 0.12 − 0.03 1 entrepreneur 9. Household size − 0.06 0.01 − 0.18 0.10 − 0.12 − 0.02 0.03 0.02 1 10. GDP p.C. 0.15 − 0.03 0.23 0.05 0.30 0.07 − 0.04 − 0.05 − 0.27 1 11. GDP growth − 0.09 0.07 − 0.11 − 0.07 − 0.26 − 0.09 0.00 0.09 0.09 − 0.55 1 p.C. 12. Unemployment − 0.07 − 0.01 − 0.14 0.00 − 0.12 0.04 0.06 − 0.04 0.16 − 0.44 − 0.09 1 13. Economic 0.13 0.00 0.22 0.03 0.28 0.10 − 0.06 − 0.07 − 0.20 0.67 − 0.47 − 0.32 1 freedom 14. Political 0.07 0.02 0.22 0.04 0.22 0.14 − 0.02 − 0.08 − 0.21 0.57 − 0.42 − 0.11 0.72 1 freedom 15. Social freedom 0.08 − 0.01 0.24 0.06 0.23 0.14 − 0.03 − 0.06 − 0.23 0.66 − 0.44 − 0.23 0.67 0.92 1 Correlations in italics are significant at p < 0.01. The sample includes 45 countries (N =15,339) Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 439 Table 5 Main results Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Constant 27.160*** 27.720*** 26.580*** 26.860*** 26.950*** 27.480*** (5.029) (5.072) (5.118) (4.826) (5.572) (5.476) Individual-level controls Gender (female) 1.566** 1.506** 1.575** 1.564** 1.542** 1.527** (0.731) (0.713) (0.721) (0.717) (0.720) (0.722) Household income Reference = Household income is low Middle − 1.024 − 1.010 − 0.982 − 0.796 − 0.838 − 0.819 (0.716) (0.713) (0.720) (0.713) (0.716) (0.713) High − 2.404** − 2.316** − 2.268** − 2.124** − 2.157** − 2.161** (0.960) (0.949) (0.946) (0.926) (0.932) (0.932) Education Reference = Education is none Some secondary 1.641 1.157 1.239 1.496 1.471 1.480 (1.168) (1.221) (1.224) (1.208) (1.207) (1.200) Secondary 1.892* 1.175 1.278 1.486 1.475 1.517 (0.996) (1.008) (1.046) (1.040) (1.042) (1.031) Post-secondary 2.431* 1.761 1.932 2.234* 2.218* 2.257* (1.278) (1.329) (1.366) (1.343) (1.347) (1.335) Graduate experience 4.971*** 4.521*** 4.756*** 5.020*** 4.997*** 5.039*** (1.464) (1.477) (1.500) (1.559) (1.548) (1.541) Start-up skills 0.303 0.286 0.358 0.447 0.419 0.418 (0.938) (0.936) (0.924) (0.925) (0.933) (0.934) Fear of failure − 0.500 − 0.517 − 0.478 − 0.517 − 0.519 − 0.531 (0.707) (0.694) (0.698) (0.699) (0.701) (0.702) Knows entrepreneur 0.651 0.336 0.348 0.320 0.309 0.298 (0.652) (0.669) (0.674) (0.686) (0.680) (0.676) Household size Reference = Household size is one person 2persons − 1.205 − 1.051 − 1.257 − 1.359 − 1.357 − 1.380 (0.928) (0.951) (0.934) (0.922) (0.922) (0.914) 3persons − 1.424 − 1.583* − 1.490 − 1.643* − 1.670* − 1.662* (0.946) (0.932) (0.927) (0.916) (0.913) (0.912) 4persons − 1.775** − 1.894** − 1.645** − 1.788** − 1.780** − 1.746** (0.823) (0.846) (0.822) (0.829) (0.834) (0.837) 5persons andmore − 1.683* − 1.882** − 1.764* − 1.826* − 1.821* − 1.801* (0.957) (0.959) (0.952) (0.969) (0.969) (0.974) Country-level controls GDP p.C./100 0.023*** 0.024*** 0.024*** 0.021*** 0.022** 0.019** (0.007) (0.007) (0.007) (0.007) (0.009) (0.009) GDP growth p.C. − 0.088 − 0.076 − 0.070 − 0.058 − 0.082 − 0.096 (0.346) (0.344) (0.348) (0.354) (0.378) (0.376) Unemployment 0.580 0.569 0.564 0.583 0.547 0.553 (0.367) (0.371) (0.374) (0.374) (0.371) (0.355) Economic freedom 4.113 (13.960) Political freedom 0.028 (5.325) 440 S. A. Brieger et al. Table 5 (continued) Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Social freedom 4.292 (8.091) Independent variable Age − 0.095*** − 0.088*** − 0.106*** − 0.103*** − 0.105*** (0.029) (0.030) (0.031) (0.031) (0.031) Age 0.006*** 0.007*** 0.006*** 0.006*** (0.002) (0.002) (0.002) (0.002) Cross-level effects Age × Economic freedom − 0.573* (0.311) Age × Economic freedom 0.049*** (0.014) Age × Political freedom − 0.027 (0.081) Age × Political freedom 0.016*** (0.005) Age × Social freedom 0.011 (0.114) Age ×Social freedom 0.026*** (0.006) Intraclass coefficient 0.109 0.111 0.111 0.110 0.111 0.109 Individual-level variance 571.4*** 570.3*** 569.6*** 567.3*** 567.3*** 567.2*** Country-level variance 69.97*** 70.85*** 71.35*** 70.31*** 70.51*** 69.34*** AIC 141,158.5 141,132.4 141,117.1 141,090.6 141,095.8 141,092.4 Log likelihood − 70,559.3 − 70,545.2 − 70,536.6 − 70,519.3 − 70,521.9 − 70,520.2 *p <0.1; **p < 0.05; ***p < 0.01. Dependent variable: Social value creation. Standard errors are in parentheses. Mean-centered variables were used for independent and moderating variables. The sample includes 45 countries (N = 15,339) Fig. 3 Entrepreneur’s age and social value creation goals Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 441 Fig. 4 Entrepreneur’s age and social value creation goals: The moderating effect of economic freedom generation X entrepreneurs (those individuals born entrepreneurs’ social value creation [Wald chi-square = 1965 and 1982). To further disentangle cohort effects 20.27; p= 0.000]. Second, we test to determine whether from age effects in our data, we re-estimated our models age’s effect on social value creation decreases at low controlling for cohort effects. Controlling for such ef- values of age, and increases at high values of age. Our fects did not reveal different patterns of results; all results confirm a U-shaped relationship between age and coefficients were of similar magnitude and pointed in social value creation, as the slopes are negative and the same direction as our model based on the total significant at lower values of age (applies for the age sample (see results in Table 6). We are therefore confi- years 18 to 43) and positive and significant at high dent that the effects of entrepreneurs’ age are not cohort values of age (applies for the age years 57 to 64). We effects. also compared the AIC fits of a quadratic and a linear Second, we tested whether the inclusion of institu- model, and found that the quadratic model has a better tional quality still persists across the age distribution. fit. We also run a Sasabuchi’stest (1980) to test for the We thus performed quantile regression and see how presence of a U-shaped relationship using a country institutional quality behaves in each percentile. Results fixed-effects specification of Model 3. The result con- displayed in Table 7 show that the hypothesized effects firms the presence of a U-shaped relationship (t value = remains qualitatively stable across percentiles, suggest- 2.35; p < 0.01). Third, we follow Lind and Mehlum ing that the interactions are not distorting our main (2010) in using the Fieller approach to estimate confi- results. dence intervals for the extreme lower and upper bounds Third, we re-ran our analysis and excluded with of age (95% interval for an extreme point): the interval Spain, the UK, and China those countries with larger ranges from 41.74 to 55.36 years, with an extreme point sampling sizes. The results, which are available upon of 48.55 years. Fourth, we include all entrepreneurs request, are entirely in accordance with our initial above 64 years of age. We find very similar results, with findings. the exception that the U-shaped relationship between Moreover, we ran an additional set of analyses to test age and social value creation becomes even stronger and the robustness of our curvilinear relationship (see Haans more profound since entrepreneurs aged above 64 years report even higher levels of social value creation. Final- et al. 2016). All results are available upon request. First, we conduct a Wald test to evaluate the joint significance ly, we test the robustness of our U-shaped age effect by of age and age squared. The results indicate that the joint considering the stage of entrepreneurial activity, i.e., effect of direct and squared terms of age is significant for when controlling for nascent entrepreneurship—that is, all entrepreneurs who intend to start-up an own busi- We thank an anonymous reviewer for this suggestion. ness, but have not already done so. The result is in line 442 S. A. Brieger et al. Fig. 5 Entrepreneur’s age and social value creation goals: The moderating effect of political freedom with the one reported in Model 3 of Table 5,withthe and postmaterialist cultures are key components of a only difference that the coefficient of the linear term is “syndrome” of modernization in which economic, now significant at the 10% level, whereas the coefficient socio-cultural, and political trends are generally uni- of the squared term is now significant at the 5% level. formly and predictably linked (Inglehart and Welzel 2005; Welzel 2013). 5.3 Auxiliary analysis In line with this reasoning, we test whether the hu- man development index, postmaterialism, and While in our paper we focus on the role of formal Hofstede’s cultural value dimensions of individualism and power distance also moderate the relationship be- institution as moderators of the age-value creation goals relationship, in this auxiliary analysis, we investigate tween entrepreneurs’ age and social value creation. For completeness, we also included Hofstede’s two other whether informal institutions also play a role. While this conjecture goes beyond our theorizing, it is worth noting dimensions: uncertainty avoidance and masculinity. Ta- ble 8 results show that human development—which is a that previous research highlights that institutional free- doms, socioeconomic development, and individualist combined measure integrating people’s (1) health, (2) Fig. 6 Entrepreneur’s age and social value creation goals: The moderating effect of social freedom Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 443 Table 6 Robustness check results Model 7 Model 8 Model 9 Model 10 Model 11 Constant 28.240*** 27.350*** 27.750*** 27.830*** 28.360*** (5.041) (5.094) (4.804) (5.549) (5.439) Individual-level controls Yes Yes Yes Yes Yes Cohort Reference = Baby boomers Generation X − 1.346** − 1.113* − 1.209** − 1.216** − 1.226** (0.607) (0.610) (0.600) (0.585) (0.590) Millennials 0.222 − 1.277 − 0.975 − 1.030 − 0.984 (1.338) (1.462) (1.450) (1.458) (1.456) Country-level controls Yes Yes Yes Yes Yes Economic freedom 3.774 (13.960) Political freedom − 0.073 (5.300) Social freedom 4.083 (8.064) Independent variable Age − 0.111** − 0.129** − 0.145*** − 0.143*** − 0.144*** (0.050) (0.0530) (0.055) (0.054) (0.054) Age 0.005** 0.006*** 0.005** 0.005** (0.002) (0.002) (0.002) (0.002) Cross-level effects Age × Economic freedom − 0.575* (0.310) Age × Economic freedom 0.051*** (0.013) Age × Political freedom − 0.027 (0.080) Age × Political freedom 0.016*** (0.005) Age × Social freedom 0.007 (0.112) Age × Social freedom 0.027*** (0.006) Intraclass coefficient 0.111 0.111 0.110 0.110 0.109 Individual-level variance 569.8*** 569.6*** 567.2*** 567.2*** 567.1*** Country-level variance 71.10*** 71.23*** 70.16*** 70.35*** 69.20*** AIC 141,124.3 141,119.2 141,091.9 141,097.2 141,093.6 Log likelihood − 70,539.2 − 70,535.6 − 70,517.9 − 70,520.6 − 70,518.8 *p <0.1; **p < 0.05; ***p < 0.01. Dependent variable: Social value creation. Standard errors are in parentheses. Mean-centered variables were used for independent and moderating variables. All regressions control for individual and country-level variables as introduced in Table 5 above. The sample includes 45 countries (N = 15,339). Baby boomers (born 1945–1964), Generation X (born 1965–1982), Millennials (born 1983–1996) education, and (3) standard of living—steepens the U- age effect on social value creation), whereas individual- shaped relationship between entrepreneurs’ age and so- ism and masculinity strengthen the direct effect of age cial value creation. Moreover, postmaterialism on social value creation (but not the association of age strengthens the positive relationship between age squared and social value creation). Also, we find evi- squared and social value creation (but not the direct dence that power distance flattens the U-shaped 444 S. A. Brieger et al. Table 7 Quantile regression results Quantiles 25% 50% 75% 25% 50% 75% 25% 50% 75% Independent variable Age − 0.105*** − 0.113*** − 0.063** − 0.109*** − 0.112*** − 0.061** − 0.088*** − 0.113*** − 0.069** (− 4.700) (− 3.520) (− 2.420) (− 4.06) (− 3.09) (− 2.16) (− 3.32) (− 2.99) (− 2.53) Age 0.006*** 0.00329 0.004* 0.006*** 0.005* 0.003 0.005** 0.007** 0.005** (3.530) (1.33) (1.85) (3.29) (1.70) (1.42) (2.57) (2.20) (2.27) Cross-level effects Economic 3.462 1.410 − 6.706 freedom (0.730) (0.220) (− 1.630) ×Age − 0.260 − 0.429 − 0.615** (− 1.190) (− 1.420) (− 2.280) ×Age 0.043** 0.080*** 0.069*** (2.410) (3.430) (3.080) Political freedom − 11.720*** − 2.891* − 2.455*** (− 10.950) (− 1.820) (− 2.710) ×Age − 0.095 − 0.083 − 0.062 (− 1.570) (− 1.100) (− 0.740) ×Age 0.010** 0.023*** 0.027*** (2.130) (3.570) (3.720) Social freedom − 22.100*** − 5.350** − 2.607* (− 14.030) (− 2.370) (− 1.780) ×Age − 0.0574 − 0.0470 − 0.187** (− 0.560) (− 0.490) (− 2.160) ×Age 0.0189*** 0.0415*** 0.0524*** (2.940) (4.930) (7.790) *p <0.1; **p < 0.05; ***p < 0.01. Dependent variable: Social value creation. Quantile regressions for the 25th, 50th, and 75th percentiles. Standard errors are in parentheses. Mean-centered variables were used for independent and moderating variables. All regressions control for individual and country-level variables as introduced in Table 5 above relationship. Altogether, these findings indicate that all (Minola et al. 2014), or individuals nearing retirement variables that are closely intertwined with moderniza- (Heim 2015). While these studies significantly advanced tion also moderate the relationship between entrepre- our understanding of the role of individuals’ age on neurs’ age and social value creation. entrepreneurship, they present three important limita- tions. First, prior studies often build “on the traditional depiction of mainstream entrepreneurship as an individ- 6 Discussion ualistic and profit-maximizing endeavor” (Hechavarría et al. 2012, p. 137); yet, recent research provides sub- Entrepreneurship research has long focused on the stantial evidence that entrepreneurs pursue multiple busi- relationship between individuals’ age and ness objectives, seeking to not only make profits but their entrepreneurial activity. Existing literature mainly often also contribute to societal well-being and a healthy explores age differences in “conventional” entrepreneur- environment (e.g., Bacq et al. 2016;Cohenetal. 2008; ial motivation or behavior (Minola et al. 2016), or exam- Hörisch et al. 2017). Second, developmental theories ines different age groups separately, such as third-age such as lifespan psychology suggest that people’sinten- individuals (Kautonen et al. 2011), young entrepreneurs tions, goals, and motives differ depending on one’sstage Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 445 Table 8 Auxiliary analysis results Model 12 Model 13 Model 14 Model 15 Model 16 Model 17 Constant 26.520*** 24.200*** 25.360*** 23.610*** 23.820*** 26.440*** (5.018) (5.848) (6.719) (7.482) (8.025) (6.535) Individual-level controls Yes Yes Yes Yes Yes Yes Country-level controls Yes Yes Yes Yes Yes Yes Independent variable Age − 0.105*** − 0.112*** − 0.085** − 0.083** − 0.084*** − 0.083** (0.031) (0.033) (0.036) (0.035) (0.031) (0.034) Age 0.007*** 0.004*** 0.008*** 0.008*** 0.008*** 0.008*** (0.002) (0.002) (0.002) (0.002) (0.002) (0.002) Cross-level effects HDI 8.066 (22.780) ×Age − 0.105*** (0.031) ×Age 0.007*** (0.002) Postmaterialism values 2.001 (9.380) ×Age − 0.032 (0.151) ×Age 0.022*** (0.006) Uncertainty avoidance − 0.052 (0.055) × Age 0.002 (0.001) ×Age 0.000 (0.000) Power distance 0.093 (0.102) × Age 0.003** (0.001) ×Age − 0.000** (0.000) Individualism − 0.066 (0.118) ×Age − 0.004*** 0.000 ×Age (0.000) 0.000 Masculinity − 0.068 (0.105) ×Age − 0.004** (0.002) ×Age − 0.000 446 S. A. Brieger et al. Table 8 (continued) Model 12 Model 13 Model 14 Model 15 Model 16 Model 17 (0.000) Observations 15,339 13,234 12,797 12,797 12,797 12,797 Countries 45 35 36 36 36 36 Intraclass coefficient 0.109 0.118 0.120 0.120 0.120 0.119 Individual-level variance 567.1*** 562.1*** 569.3*** 569.3*** 569.5*** 569.4*** Country-level variance 69.66*** 75.50*** 77.78*** 77.41*** 77.50*** 77.18*** AIC 141,090.0 121,270.2 117,660.4 117,658.9 117,655.3 117,658.6 Log likelihood − 70,519.0 − 60,609.1 − 58,804.2 − 58,803.5 − 58,801.7 − 58,803.3 *p <0.1; **p < 0.05; ***p < 0.01. Dependent variable: Social value creation. Standard errors are in parentheses. Mean-centered variables were used for independent and moderating variables. HDI human development index in his/her lifecycle and, consequently, shift individuals’ the characteristics of the formal environment where goal orientations (Baltes et al. 2006;Ebneretal. 2006). these entrepreneurs are embedded. Compared to coun- While prior studies build on this perspective to assess tries with low institutional quality, countries with high what may trigger individuals’ entrepreneurial motivation institutional quality allow middle age entrepreneurs (Minola et al. 2016) or new venture growth (Gielnik et al. to follow their innate affinity towards personal wealth 2012), we know little about the relationship between and prosperity, whereas younger and older entrepreneurs’ age and the value creation goals they seek entrepreneurs to create higher social value. More spe- through their businesses. Third, the successful realization cifically, our analysis reveals that economic freedom of intentions, goals, and motives is “sensitive” to context steepens the U-shaped relationship between an entre- (Athayde 2009; Obschonka and Silbereisen 2012; preneur’s age and his/her social value creation. Evi- Stephan et al. 2015). However, previous research on the dently, well-functioning economic institutions seem to relationship between age and entrepreneurship either provide a fruitful environment for entrepreneurs to neglected this contextual perspective (Carsrud and pursue their goals. Conversely, environments with Brännback 2011; Gielnik et al. 2012; Obschonka and low-quality institutions provide more restrictive condi- Silbereisen 2012) or focused on cultural features tions that inhibit individual decision making, and thus (Minola et al. 2016). Consequently, a focus on institu- make it more difficult for entrepreneurs to pursue their tional characteristics in the age-value creation linkage individual preferences regarding value creation when provides a more complete understanding of structuring and running their venture, i.e., economic the conditions under which entrepreneurs may better value creation in middle adulthood, and social value realize their value creation goals. creation in young and old adulthood. As our figures Our study argues for age-dependent inter-individual demonstrate, the curvilinear relationship is flatter in differences in value creation goals by entrepreneurs. weak institutional settings, indicating that young, mid- Even if the cross-sectional dataset used in this dle, and old entrepreneurs may possess a more equal study does not allow to draw a final conclusion as to blend of both social and economic value creation goals, whether entrepreneurs change their value creation compared with entrepreneurs in stronger institutional goals over their lifespan, our results provide a first settings where the U-shaped relationship between en- evidence that entrepreneurs’ goals differ depending trepreneurs’ age and social value creation is steeper. In on their age and supposedly position in the lifespan. settings where political and social freedoms are weak, we find a linear negative relationship between entre- In that, entrepreneurs in their middle age are relatively more economically and less socially oriented, whereas preneurs’ age and social value creation goals, implying both younger and older entrepreneurs express higher that entrepreneurs are more commercially oriented socially oriented goals through their businesses. We with increasing age. This is understandable given the also find that cross-sectional age differences in entre- fact that the conditions under which entrepreneurs preneurs’ goals in doing business vary depending on operate are much more disadvantageous, and it might Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 447 be the case that responsibilities increase much more Parker 2009). By integrating the age-entrepreneurship with age in tougher environments. In sum, economic, debate with the multi-dimensionality of value creation political, and social freedoms influence entrepreneurial goals of entrepreneurs and their businesses, we theorize value creation and corresponding economic outcomes and show that a U-shaped relationship exists between since they affect how entrepreneurs may perceive costs entrepreneurs’ age and their perceptions to create social and benefits depending on their age (Boettke and value goals with their businesses. As such, this study Coyne 2009). Our results thus raise attention to insti- fundamentally refines our understanding of the extant tutional mechanisms that shape individuals’ entrepre- theory by challenging the well-established inverted U- neurial activities at different life stages and in different shaped relationship between individuals’ age and countries. entrepreneurship. Interestingly, the results from our auxiliary analysis Second, our study shows that entrepreneurs’ creation also suggest that informal institutions also influence the of social value through their organizations changes relationship between entrepreneurs’ age and their social across different age groups. We respond to both calls value creation goals. This seems logical given the fact to broaden the scope of entrepreneurial value creation that high-quality institutions, which guarantee people’s (Amit et al. 2001; Cohen et al. 2008; Hechavarría et al. economic, political, and social freedoms, are typically 2017) and to apply a developmental perspective surrounded by empowering existential and cultural con- to entrepreneurship research (Carsrud and Brännback ditions (Inglehart and Welzel 2005; Welzel 2013). As 2011; Gielnik et al. 2012; Lévesque and Minniti 2006; Welzel (2013) points out in “Freedom Rising,” human Minola et al. 2016; Obschonka and Silbereisen 2012). empowerment advances on a three-lane trajectory Focusing solely on financial-related goals and outcomes consisting of (1) a socioeconomic development in form in entrepreneurship leads to an incomplete understand- of incomes and education (which generate capabilities ing of entrepreneurial behavior in individuals (Zahra to exercise universal freedoms), (2) an emancipative and Wright 2011). By broadening the scope to relevant culture that prioritizes autonomy, choice, and self- dependent variables such as entrepreneurs’ social value expression (which embody motivations to exercise uni- creation goals and by taking a developmental perspec- versal freedoms), and (3) civic entitlements (which es- tive into account, this study advances and extends the tablish guarantees to exercise universal freedoms). current discourse on (multiple) value creation goals in Based on large cross-national samples, Welzel argues entrepreneurship (e.g., Brieger et al. 2019; Hechavarría and shows empirically that socioeconomic development et al. 2017; Hörisch et al. 2017, 2019). culminates into an emancipative culture, which, in turn, Third, we contribute to the scholarly debate on insti- motivates people to be involved in social movement tutional theory in entrepreneurship research (Bruton activities to introduce, defend, and extend civic entitle- et al. 2010; De Clercq et al. 2013) by showing that ments in form of economic, political, and social free- formal institutions influence the relationship between doms (Welzel 2013). Consequently, as socioeconomic, entrepreneurs’ age and their value creation goals. Our cultural, and institutional conditions are usually multilevel approach predicts age-related differences in interlinked, we find also significant moderating effects the extent to which entrepreneurs create social value of socioeconomic and cultural factors. with their businesses. Drawing on lifespan developmen- tal psychology and institutional theory, we argue and 6.1 Theoretical contributions empirically show that the quality of formal institutions influences the relationship between entrepreneurs’ age Our study provides three main contributions to theory. and their value creation goals. We show that a country’s First, we are among the first to theoretically argue and institutional quality is a key contingency that helps empirically show cross-sectional age differences in so- explaining entrepreneurs’ value preferences. We also cial value creation goals of entrepreneurs. Existing stud- contribute to the debate around institutional theory and ies dealing with individuals’ age and entrepreneurship social value creation (Brieger et al. 2019; Hechavarría typically focus on “conventional” entrepreneurship by 2016) by introducing an age perspective to such debate. showing that an individual’s desire to start a venture Previous research investigates the direct and indirect increases up to middle age and decreases thereafter (e.g., effects of formal and informal institutions on Funken and Gielnik 2015; Lévesque and Minniti 2006; socially oriented entrepreneurial activity. By applying 448 S. A. Brieger et al. both lifespan developmental psychology and institution- 6.2 Policy and practical implications al theory to the field of entrepreneurship, we deliver a new profound understanding of how entrepreneurs’ Our results offer important implications for policy and value creation preferences vary across different age practice. Knowing the existence of cross-sectional age groups as well as how entrepreneurs can be supported differences in entrepreneurs’ value creation goals, poli- by their countries’ institutions to achieve such pref- cy makers should design age-group specific policies to erences. Thus, we present new insights into the fac- help entrepreneurs achieving their different goals. For tors that relate to social (and economic) value crea- instance, countries could implement entrepreneurship tion in entrepreneurship across countries, thereby programs targeted at improving third-age entrepreneurs’ contributing to the ongoing debate in (social) understanding of how they can implement, integrate, entrepreneurship research (e.g., Dacin et al. 2010, and sustain societal goals in their businesses (e.g., 2011; Hoogendoorn 2016;Mairand Marti 2006, Howorth et al. 2012). Moreover, policy makers must 2009; Zahra and Wright 2011). acknowledge that their countries’ institutional quality is Finally, with our auxiliary analyses, we provide em- an important factor in the age-value creation linkage and pirical evidence that not only formal institutions but also that borrowing successful policies from countries with socioeconomic development and culture influence the very diverse institutional settings to stimulate social relationship between entrepreneurs’ age and their value value creation in entrepreneurs may not always be effi- creation goals. Many studies have provided evidence of cient. Instead, policy makers should create favorable the key role that formal institutions play for social and supportive institutional environments that allow entrepreneurial activity. However, some authors such entrepreneurs to follow their innate preferences. More- as Inglehart and Welzel (2005) have shown that societies over, policy makers may try to strengthen the abundance with high-quality formal institutions tend to have a of empowering resources such as income and education. higher level of prosperity and an emancipated culture Previous research already documented that supportive that give priority to autonomy, self-expression, and ini- existential conditions could stipulate social value crea- tiative at the same time. Consequently, if formal institu- tion (Brieger 2019; Hoogendoorn 2016). In line with tions influence social value creation, this should also this research, our auxiliary analysis reveals that apply to socioeconomic development and culture. Initial higher levels of socioeconomic development may al- evidence for this conjecture was recently provided by low entrepreneurs to follow their innate preferences. Brieger et al. (2019) who point out that entrepreneurs We also suggest that the abundance of financial se- create more social value with their ventures when they curity and provision of social and financial support are not only empowered institutionally (e.g., institutions could also motivate entrepreneurs in their middle protect political, and social freedoms) but also existen- ages to create more social value. Public sector expen- tially (e.g., having resources) and psychologically (e.g., diture has been found to be positively linked with a culture gives priority to autonomy, equality, and partic- country’s level of social entrepreneurial activity ipation). Our study supports the presence of a triad of (Hoogendoorn 2016). economy, culture, and institutions by showing that all Our results are also relevant for potential entrepre- three components moderate the relationship between neurs. Empirical evidence shows that structural changes entrepreneurs’ age and their social value creation goals in the economy of developed countries—including de- in a predictable way. In view of these results, we can clining traditional labor markets, the impact of new conclude that all those interacting components of mod- technologies, and youth unemployment—are “forcing” ernization, such as (1) institutional freedoms in terms of many young and older individuals to consider self- economic, social, and political freedoms, employment over traditional employment (e.g., (2) socioeconomic development in terms of higher Kautonen et al. 2014; Minolaetal. 2016). To fulfill their levels of incomes, health and education, and (3) an often non-financial motives and goals, younger and emancipative culture that prioritizes autonomy and in- older individuals should acknowledge the existence of dependence and emphasizes self-expression and quality an “alternative” view of entrepreneurshipthat of life over economic and physical security play impor- challanges entrepreneurs to solve environmental and tant moderating roles in the relationship between entre- social challenges and government failures such as in- preneurs’ age and their social value creation goals. equality, poverty, and pollution. Entrepreneurs’ age, institutions, and social value creation goals: A multi-country study 449 6.3 Limitations and future research directions value creation are not orthogonal, but rather dimension- al, concepts, which describe entrepreneurs’ activities on Our study is not without limitations, which present a continuum ranging from purely social to purely fertile ground for future research. First, while the GEM commercial. data enables multivariate analyses which increases our Third, as mentioned before, according to lifespan understanding of how the variables are interrelated, its psychology, individuals’ goals and motives are not al- cross-sectional nature, however, can only allow us to ways linked to age, but rather to an individual’s percep- provide information about age group differences or tion of his/her time remaining; as proposed by inter-individual differences rather than providing infor- Carstensen (2006,p. 1913), “because goal-directed be- mation about intra-individual age change. Although havior relies inherently on perceived future time, the cross-sectional designs like ours are very common in perception of time is inextricably linked to goal selec- lifespan developmental psychology studies (see tion and goal pursuit.” When time is perceived as finite, Schmidt and Teti 2005 and Whitbourne 2019 for two e.g., due to major life events such as illnesses, war, or reviews), longitudinal studies would be preferable to geographical relocation, associated opportunities are al- provide the ultimate evidence on the effect of entrepre- so affected, potentially causing personal goal shifts neurs’ age changes on social value creation across time. (Carstensen 2006; Lang and Carstensen 2002). Previous More importantly, our cross-sectional design does not research indicates that when manipulating or controlling fully allow us to determine conclusively whether the U- for people’s time perspective, there are diminished age shaped relationship between entrepreneurs’ age and so- differences regarding motivations (Carstensen 2006; cial value creation are due to true aging effects, cohort Gielnik et al. 2012; Lang and Carstensen 2002;Zacher effects, or period effects (Mackenzie et al. 2018). De- and Frese 2009). Thus, future research should control for individuals spite these limitations, we still believe that what we ’ subjective sense of their perceived time observe are age effects rather than cohort effects for constraints. two reasons. First, the U-shaped relationship is still Fourth, our focus on formal institutional quality, present when controlling for cohort effects (see measured by a country’s level of economic, political, Table 6). Despite our belief that aging effects, rather and social freedom is just one plausible moderating than cohort effects, drive our results, further research is mechanism in the age-social value creation relationship. needed to test relationships using different study de- In line with our auxiliary analysis, future research signs; yet, we acknowledge the challenges associated should investigate if and how additional informal insti- with the implementation of a longitudinal design that tutions such as a country’s trust level or social identity enables to follow individuals throughout their whole influence the relationship between age and social value lifespan as well as the limitations of longitudinal designs creation (e.g., Brieger 2019; Pathak and Muralidharan in lifespan developmental psychology studies (see 2016; Stephan et al. 2015). With respect to recent in- Schmidt and Teti 2005). sights concerning the interplay of gender and informal Second, our study captures entrepreneurs’ perceived institutions (Brieger et al. 2019; Hechavarría et al. value creation rather than actual value creation. Future 2017), it wouldalsobeinterestingtoexamineage research could explore whether more objective mea- patterns in the relationships between gender, culture, sures of such variable would yield to similar results. and value creation goals. An additional limitation refers to an individual’sunder- Finally, the high correlation between formal institu- standing of social and economic value creation. While tional quality and economic development stage could one may think of extreme cases of commercial entre- lead to the assumption that not primarily well- preneurship where founders solely aim to achieve finan- functioning institutions, but rather the abundance of cial provision and asset generation on the one side or material security, moderates the age-social value crea- pursue purely philanthropic business models on the tion linkage. If material security is certain, entrepreneurs other side, this is mostly not the case. Even at these may prioritize values that are more prevalent in the extreme points, there are still aspects of both. That is, respective life phase. We find that GDP per capita does social value creation also relies on economic realities not reinforce the negative linkage between age and just as economic-oriented businesses generate social social value creation goals, but it moderates the positive value (Austin et al. 2006). 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