Measurement and structural invariance of entrepreneurial investment climate: A cross-country scale development. Issue 5 (October 2016)

• Record Type: Journal Article
• Authors: Nam, Dae-il; Kim, Juhee; Arthurs, Jonathan D.; Sosik, John J.; Cullen, John B.
• Is Part Of: International business review. Volume 25:Issue 5(2016:Oct.)
• Page Start: 1053
• Page End: 1065
• Publication Date: 2016-10
• Subjects: Invariance -- Investment climate -- Entrepreneurship -- Property rights -- Institutional environment; International business enterprises -- Periodicals; 338.8805
• DOI: 10.1016/j.ibusrev.2016.01.004
• Languages: English
• ISSNs: 0969-5931

Abstract

Highlights: Explaining about how entrepreneurial climates are perceived by individuals. Developing and validating a scale to measure entrepreneurial investment climate across 72 countries. Invariance test for the model across different time periods and country types. Multiple-group CFA provided evidence of invariance of the proposed four-factor model: (1) Society Stability, (2) Labor and Regulations, (3) Quality of Infrastructure, and (4) Ease of Finance dimensions. Abstract: Testing invariance is important in cross-cultural studies because a lack of invariance may bias empirical results and lead to improper theoretical inferences. This study introduces and validates a scale for measuring entrepreneurial investment climate, consisting of four factors: Societal stability, Labor and Regulations, Quality of Infrastructure, and Ease of Finance. The instrument was developed using World Bank Group data from 51, 169 firms and 72 institutional profiles to determine investment climate. Confirmatory factor analyses reveal the validity of the scale and its robustness across country types and time. The study's implications for practice and future research are discussed.