What is the Entrepreneurship Database?
The Entrepreneurship Database is a unique source of comparable and cross-country data on business registration aimed at facilitating a greater understanding of the dynamics of private enterprises around the world. The main Entrepreneurship Database indicator measures the new business density. It is the number of newly registered firms, in which ownership liability is limited to its investment, per calendar year, normalized by adult population. This is a valuable indicator which quantifies the impact of regulatory, political, and macroeconomic institutional changes on new business registration, a vital component of a dynamic private sector. The 2021 Entrepreneurship Database includes a new approach to measuring entrepreneurial activity with a gender dimension. It collects data on the number of new female and male LLC owners, new female and male LLC owners and new female and male sole proprietors.
Nevertheless, it should be noted that the data themselves only provide a snapshot of a given economy’s business demographics, and cannot by themselves explain the factors that affect the business creation cycle. However, when the Entrepreneurship Database is combined with other datasets - researchers and policymakers can better understand the dynamics of the business creation process.
What is the We-Data?
The Women Entrepreneurs Finance Initiative (We-Fi) supports women entrepreneurs by scaling up access to financial products and services, building capacity, expanding networks, offering mentors, and providing opportunities to link with domestic and global markets. In particular, through the We-Data project, this initiative aims to collect and publish global gender-disaggregated data on business entry and ownership.
Measuring women’s entrepreneurial activity - with the We-Data project - is critically important for a better understanding of how female entrepreneurs contribute to the economy and society. The lack of comprehensive sex-disaggregated data on business entry and ownership presents a significant obstacle to the global and diversified analysis of female entrepreneurship. Due to insufficient standardized and country-comparable data, the diagnostics of gender gaps in entrepreneurship are limited.
The Entrepreneurship Database has developed a data collection methodology to systematically measure entrepreneurial activity. The 2021 Entrepreneurship Database contains annual data on the number of firms over the period of 2006-2020. To facilitate cross-country comparability, the Entrepreneurship Database employs a consistent unit of measurement, source of information, and concept of entrepreneurship that is applicable and available among the diverse sample of participating economies.
The data collection process involves telephone interviews and email correspondence with business registries. See complete list of sources. The main sources of information for this study are national business registries. In a limited number of cases where the business registry was unable to provide the data – most often due to an absence of digitized registration systems – the Entrepreneurship Database uses other alternatives sources, such as statistical agencies, tax and labor agencies, chambers of commerce, and private vendors or publicly available data.
Definition of the variables
The definition of entrepreneurship used is limited to the formal sector. Yet, it should be noted that the exclusion of the informal sector is based on the difficulties of quantifying the number of firms that compose it, rather than on its relevance for developing economies. The Entrepreneurship Database facilitates the analysis of the growth of the formal private sector and the identification of factors that encourage firms to begin operations in or transition to the formal sector.
- Newly registered companies with limited liability: The main input for calculating the new business entry density rate is the number of newly registered companies with limited liability (or its equivalent), per calendar year. Importantly, limited liability is a concept whereby the financial liability of the firm’s members is limited to the value of their investment in the company. It is a separate legal entity that has its own privileges and liabilities. This study collects information on all limited liability corporations regardless of size. Partnerships and sole proprietorships are not considered in the analysis due to the differences with respect to their definition and regulation worldwide. Data on the number of total or closed firms are not included due to heterogeneity in how these entities are defined and measured.
- New business density rate: The number of newly registered firms with limited liability per 1,000 working-age people (ages 15-64) per calendar year.
- Total number of registered companies with limited liability: It refers to the overall stock of companies with limited liability companies at the end of each calendar year.
- Total business density rate: The total number of registered firms with limited liability per 1,000 working-age people (ages 15-64) at the end of each calendar day.
- Closed companies with limited liability: They refer to the number of formally deregistered companies with limited liability companies in business registry database. It does not include all other cases such as the suspension of firms or temporary measures.
- Closed business density rate: The number of deregistered firms with limited liability per 1,000 working-age people (ages 15-64) per calendar year.
- Adult population: The main source of information is the World Development Indicators. If the population data were not available in the World Development Indicators; other sources such as the CIA, the ILO, the Index Mundi or national databases were used.
- Business owners: Individuals that own at least one share of a newly registered limited liability company (LLC). The number of owners of new LLCs is disaggregated by gender for each calendar year. The share of owners of LLCs is a proportion of the female/male business owners out of the total number owners of LLCs.
- Business directors: Individuals who conduct the affairs of limited liability companies registered in the calendar year. The number of directors of new LLCs is disaggregated by gender for each calendar year. The share of directors of LLCs is a proportion of the female/male directors out of the total number of directors of LLCs.
- Sole proprietors: A sole proprietorship is a business entity owned and managed by a single individual who is indistinguishable from the business and personally liable. The number of sole proprietors is disaggregated by gender for each calendar year. The share of sole proprietors is a proportion of the female/male sole proprietors out of the total number of sole proprietors.