Macroeconomic and institutional drivers of early failure among self-employed entrepreneurs: an analysis of the euro zone

Abstract The development of entrepreneurial activity is essential to achieve sustainable economic growth and development in the euro area. However, the European institutions have not given the same importance to the failure of entrepreneurial activity and its causes. With this in mind, and considering the countries of the euro area, on the basis of Eurostat’s business demography data for the years 2008 to 2016, an analysis of panel data was conducted relating the early failure of self-employed entrepreneurs to their macroeconomic and institutional environment. The results thus show a negative relationship with respect to the quality of formal institutions, entrepreneurial culture and social norms, the efficiency of goods markets and entrepreneurial freedom. On the other hand, a positive relationship is shown with respect to the high status assigned to successful entrepreneurs