Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 1368: Fertile Soil for Intrapreneurship: Impartial Institutions and Human Capital

Martin Ljunge () and Mikael Stenkula ()
Additional contact information
Martin Ljunge: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Mikael Stenkula: Research Institute of Industrial Economics (IFN), Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden

Abstract: Intrapreneurs, entrepreneurial employees, constitute an important force behind innovations in the economy. Yet, what factors that promote intrapreneurship at the country level are an underdeveloped research area. This paper provides a seminal contribution regarding the methodological approach and the broad set of potential explanatory factors studied. Based on machine-learning techniques (LASSO and EBA methods), we investigate the influence of over 60 factors capturing institutional, demographic, cultural, and developmental factors. We find that the quality of government measured as impartiality, i.e., that the political institutions treat the citizens in a non-discriminatory fashion and do not favor some groups or individuals, and the level of human capital, measured as the average years of schooling, are the most important factors predicting the level of intrapreneurship across countries. Instrumental variable results support a causal interpretation. The findings emphasize the importance of policy to establish well-functioning and impartial institutions as well as to promote higher education.

Keywords: Intrapreneurship; Impartial institutions; Human capital; Machine-learning

JEL-codes: E02; I20; L26; O17; O30

32 pages, November 11, 2020

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