Loosen up? Cultural tightness and national entrepreneurial activity

- National culture is related to new business ownership.
- National culture is not related to high-growth or social entrepreneurship.
- Tightness is not related to entrepreneurship.

The level of entrepreneurship between countries differs consistently. A source of this variance lies in national culture differences. Recently, the cultural dimension “tightness” has been introduced in the literature. Tightness refers to the degree to which a nation has strong norms and a low tolerance for deviant behavior. Tightness can have a direct effect on national entrepreneurial activity. It can also moderate the strength and/or direction of the relationship between other cultural characteristics and entrepreneurship. Such moderation might explain previous studies' inconclusive findings. This study analyzes tightness's impact on new business ownership, high-growth entrepreneurship, and social entrepreneurship, using recent secondary data from 29 countries. The results show that tightness has neither a direct nor a moderating effect on entrepreneurship. Other cultural dimensions, such as individualism and uncertainty avoidance, have an impact on new business ownership, but not on high-growth entrepreneurship or social entrepreneurship. This suggests that policy makers can use formal institutions to foster high-growth entrepreneurship and social entrepreneurship - even in nations whose cultural conditions do not seem to be supportive.