Formal and Informal Social Capital as Determinants of Male and Female Entrepreneurship in Europe

This article analyses the effect of social capital on entrepreneurship in Europe, distinguishing between formal and informal social capital. The analysis is based on an integrated dataset on 27 European countries from the European and World Values Surveys. Social capital has a significant impact on entrepreneurship that differs according to its formal and informal components. Men use the opportunities opened up to individuals in Europe by formal social capital through involvement in organisations to access wage employment. Women tend instead to take advantage of formal social capital to turn to entrepreneurship. Informal social capital, through strong interpersonal relationships, facilitates entrepreneurial activity.