Demographics and Entrepreneurship: Evidence from Germany and India

There is increasing empirical evidence to suggest that the source of economic growth for many nations is entrepreneurial activity (Audretsch and Fritsch, 2003). However, there is still a strong need for empirical support on the various theoretical factors that are hypothesized to foster entrepreneurial activity. With scholars questioning the applicability and validity of theory in global settings, many national level empirical studies are needed in different geographical and cultural contexts. This chapter attempts to examine the empirical evidence on the impact of three critical demographic factors namely, migration, population structure and higher education on entrepreneurial activity, in the cross-cultural context of Germany and India. Germany and India have different levels of entrepreneurial activities (Global Entrepreneurship Monitor, 2002). They also share some interesting commonalities and differences in demographics. Some of these commonalities and differences have been associated with entrepreneurship in the literature. These are: migration (Aldrich and Waldinger, 1990; Constant et al., 2004), higher education (Baumol, 2005; Chander and Thangavelu, 2004) and population structure (Wagner and Sternberg, 2004). Hence, it would be interesting to study how these variables have contributed to differences in entrepreneurial activities in the two countries, even though there are many other factors like unemployment, participation of