International Business Review
Volume 25, Issue 5, October 2016, Pages 1053–1065
 

Dae-il Nama, , , Juhee Kima, 1, , Jonathan D. Arthursb, 2, , John J. Sosikc, 3, , John B. Cullend, 4,
a Korea University Business School, Anam-Dong, Seongbuk-Gu, Seoul 136-701, Republic of Korea
b Oregon State University, College of Business, Corvallis, OR 97331, United States
c Management and Organization, Great Valley School of Graduate Professional Studies, The Pennsylvania State University, Malvern, PA 19355-1443, United States
d Department of Management, Information Systems, and Entrepreneurship, College of Business, Washington State University, Pullman, WA 99164-4736, United States
http://dx.doi.org/10.1016/j.ibusrev.2016.01.004

Abstract
Testing invariance is important in cross-cultural studies because a lack of invariance may bias empirical results and lead to improper theoretical inferences. This study introduces and validates a scale for measuring entrepreneurial investment climate, consisting of four factors: Societal stability, Labor and Regulations, Quality of Infrastructure, and Ease of Finance. The instrument was developed using World Bank Group data from 51,169 firms and 72 institutional profiles to determine investment climate. Confirmatory factor analyses reveal the validity of the scale and its robustness across country types and time. The study’s implications for practice and future research are discussed.

Keywords
Invariance; Investment climate; Entrepreneurship; Property rights; Institutional environment