Title: The impact of ethnolinguistic diversity on entrepreneurial activity: a cross-country study

Authors: Craig S. Galbraith, Jacqueline Benitez-Galbraith

Addresses: Department of Management, University of North Carolina Wilmington, Wilmington, NC 28403, USA. ' Department of Foreign Languages, University of North Carolina Wilmington, Wilmington, NC 28403, USA

Abstract: The relationship between language diversity, ethnic fractionalisation and economic activity is both complex and open to heated debate. In this study, we empirically examine the impact linguistic diversity and ethnolinguistic fractionalisation has upon entrepreneurial behaviour at the country level of analysis. Utilising an economic club theory approach to social capital, this study supplements the growing socioeconomic literature that examines the relationship between diversity and economic growth. We find that while ethnolinguistic diversity is associated with higher levels of entrepreneurial activity, diversity is also associated with higher failure rates. We also find that income disparity is closely related to entrepreneurial activity.

Keywords: language diversity; cultural fractionalisation; entrepreneurship; ethnolinguistic diversity; entrepreneurial activity; ethnic fractionalisation; economic activity; economic club theory; social capital.

DOI: 10.1504/IJESB.2009.025083

International Journal of Entrepreneurship and Small Business, 2009 Vol.8 No.3, pp.309 - 331

Published online: 12 May 2009 *

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