The Social Dimension of Entrepreneurship: the Role of Regional Social Effects

The main question of this paper is to show why individuals residing in highly entrepreneurial regions are more likely to become entrepreneurs. It deals with the so-called social dimension of entrepreneurship, that is with those elements of social capital which can be relevant for explaining local entrepreneurship. Our theoretical results suggest that the existing set of social norms and relations affect the occupational reward structure and, as a result, entrepreneurial preference. If this were the case, entrepreneurship could be stimulated by influencing institutions and social norms, as such changes would, in due course, produce effects both on pecuniary and non-pecuniary rewards.