Cultural environment, entrepreneurship and innovation in europe. The importance of history

This paper proposes a conceptual framework in which the cultural environment is shaped by historical factors and, in turn, affects entrepreneurship and innovation in the long-term. To support this idea, we have described the scientific revolution that took place in Europe at the end of the Renaissance period, when social and religious tolerance, the power of the church and the attitude of elite groups towards scientific discovery spawned different cultural environments across European regions. In addition, using historical data at NUTS-3 geographical level in Europe, we estimated an econometric model to explore the long-term impact of regional knowledge base and creativity, two important aspects of the cultural environment, on actual economic drivers. The estimates suggest that the presence of universities in the past, our measure for historical knowledge base, and the number of scientists and inventors in the past, our measure for historical creativity, have a positive effect on current levels of regional entrepreneurship and innovation. The effects of creativity depend on the scientific field of the scientists and inventors.