a study of entrepreneurship in spain through a cluster ...a study of entrepreneurship in spain...

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may · august 2006 · esic market

A study of entrepreneurship in Spain through a cluster analysisM. Ángeles López Cabarcos

Professor of the Department of Business and Commercial Studies

Paula Vázquez Rodríguez

Professor of the Department of Business and Commercial Studies

Nieves Muñoz Ferreiro

Professor of the Department of Statistical and Operative Research

University of Santiago de Compostela

AbstractIt is generally agreed among today’s researchers that it is no longer possi-ble to conceive of an advanced society that does not encompass a conti-nually growing business sector. The creation of enterprises determines thedifferent rates of growth that can be seen within countries during certainperiods.In this article a detailed study will be made of enterprise in Spain, througha description of the movement towards the formation and dissolution ofindividual firms and corporations. At the same time a detailed study willbe made of the Autonomous Regions through an analysis of conglomera-tes which, aside from facilitating comparisons, leaves room for practicaldecisions to be made.

Keywords: Entrepreneurship, enterprise, creation of businesses, clusteranalysis, analysis of conglomerates, enterprise vocation.

Codes JEL: M13


a study of entrepreneurship in spain through a cluster analysis

1. IntroductionA large number of researchers agree that today it is impossible to concei-ve of an advanced society that does not have an emerging business sectorin continual growth (Ayerbe, 1994; Shane, 1996; Cuervo, 1997; García yMarco, 1999, 2002; among others). Thus business becomes the principalgenerative factor in terms of the progress and socio-economic develop-ment of a country, (Schumpeter, 1912; Orr, 1974; Deutsch, 1975; Hausey Du Rietz, 1984; Birley, 1986, 1987; Cooper, Willard y Woo, 1986;Lafuente, 1986; Lafuente y Lecha, 1988; Acs y Audretsch, 1989;Audretsch y Acs, 1994; Carter, Stearns, Reynolds y Miller, 1994;Audresch, 1995; García y Marco, 2002, among others), in the flagship ofthe market economies (Genescá y Veciana, 1984). In the words of Cuervo(1997), “these days business capacity and quality determine the rate of acountry’s development. Different rates of increase between countries orduring particular time frames within a country are determined by the offerand quality of business potential”.

This article brings together an analysis of enterprise in Spain during theperiod 1999-2002 in the different Autonomous Regions (AARR). Thearticle has been structured in two parts. The first part includes a theoreticapproximation of the concept of enterprise and an analysis of the mostrecent empirical studies in the field through a study of the literature pro-vided by the scientific region over the years; and the second part includesa cluster analysis relative to the state of the creation of companies in Spainduring the period of study.

2. Entrepreneurship

2.1. ConceptThe term entrepreneurship was coined in the United States1 to describe acultural and methodological discipline whose objective is to inspire enter-prise and the creation of companies. Spain, like other European countries,is trying to join the entrepreneurship revolution, even adopting the verysame Saxon word and attempting to dispel principal fears, worries and

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(1) It has become themost rapidly changingdiscipline in recent yearsin Schools of Businessand Engineering in theUnited States, being present in more than1,100 universities andinstitues, 200 profesorships and 50centres specialising inentrepreneurship



half- truths that can jeopardize the creation of new businesses. There hasbeen an attempt to find a Spanish word that might synthesise this Anglo-Saxon term. Veciana (1999: 14-15) claims that the term entrepreneurshipembraces three concepts – businessman, business function and the creationof businesses – and is thus difficult to translate into Spanish. He affirmsthat the most literal Spanish term would be “empresiarialidad” (business,a general term) but this is not a term that is in frequent use and thereforeought to be ruled out. Other authors opt for words like “emprendedoris-mo” (business, a general term again) (Orti, 2003; Da Costa, 2002) or forthe descriptive “creación de empresas” (creation of companies) (Cuervo,1997; De Andrés, De la Fuente y García, 1998; García y Marco, 1999,2002; Llopis, Sabater, Tarí y Úbeda, 1999; Muñoz, 1999; Rubio, Cordóny Agote, 1999; Veciana, 1999; Barba, 2002; González, 2002; amongothers). We endorse this second employment of the term which in this workwill be referred to as “emprendimiento” (business enterprise).

The meaning of the word is of course equally important. Veciana(1999: 15) is again decisive upon the point. According to this author, it isnot important to seek a literal translation in Spanish for entrepreneurshipgiven that “in the academic sphere there is no shared criteria about itsdefinition, meaning and sphere of usage”.

This idea is supported by Stewart (1991) and by Bygrave and Hofer(1991), all of whom affirm that there is no universal definition of entre-preneurship and one should not even exist in the first place. They believethat it ought to be the researcher, within the realm of their investigations,who decides and explains clearly exactly what is understood by entrepre-neurship and by entrepreneur. However, authors such as Gartner (1985)or Vesper (1983) show that this inability to reach an agreement regardinga common definition has halted the investigative process in the area. Onthe other hand, Low y McMillan (1988) defend the idea of a universalterm and try to include the varied proposals of researchers within the termentrepreneurship and their investigations try to explain and facilitate therole of new companies in the fomentation of economic development.

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The lack of a clear and concrete, common definition of entrepreneurs-hip has led us to consider, in the first instance, those definitions whichhave been upheld by different authors over the years. Knight (1921) andSchumpeter (1934) write of future, successful combinations. Danhoff(1949) defines the nature of the activity or function and not the individualcharacteristics. The focus upon profit is the key emphasis made by Cole(1968), while Kirzner (1973) writes of the ability to anticipate the imper-fections and imbalances of the market. The achievement of competitiveadvantages and optimum financial results forms a significant part of thedefinitions given by Leibenstein (1978), Schollhammer (1982) and Car-land, Hoy, Boulton and Carland (1984). It is in 1985 that we begin to spe-ak of new possibilities in terms of business and the creation of companies(Gartner, 1985; Stevenson, Roberts and Grousbeck, 1985; Low andMcMillan, 1988; Bygrave, 1989; Gartner, 1989; Veciana, 1999). David-son (1991) considers entrepreneurship to be a gradual process that inclu-des the instigation of the enterprise as well as its growth and innovation.Similarly, Stewart (1991) and later Henderson (2002), will always includethe concept of innovation. Krueger y Brazeal (1994) discuss the search foropportunity independent of available resources. Finally, Orti (2003)widens the concept by considering the body of knowledge whose aim is tofoment the enterprising spirit. As already mentioned, within this widearray of definitions, we have chosen those of Gartner (1985, 1989), Car-land, Hoy, Boulton and Carland (1984), Low and McMillan (1988),Bygrave (1989) and Veciana (1999), where entrepreneurship is defined asthe creation of new companies.

Veciana (1999: 16-31) presents the phenomenon of the creation ofcompanies as a programme of independent scientific investigation, explai-ning its origin from four distinct theoretic viewpoints: economic, psycho-logical, socio-cultural and managerial (table 1).

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The economic viewpoint is based upon economic viability and the aver-sion to risk, showing that anyone can have the attributes necessary to movefrom being a worker for another firm to carrying out business tasks andvice-versa. The psychological viewpoint involves the determination of tho-se traits that distinguish entrepreneurs from non-entrepreneurs and success-ful businesses from unsuccessful ones. The socio-cultural viewpoint holdsthat the decision to create a company and become an entrepreneur isinfluenced by external, surrounding factors. Hagen (1960) or Greenfieldand Strickon (1981) believe that the underprivileged collectives are thosethat would develop particular attitudes towards the creation of companiesand the assumption of risks. Other authors, for example Shapero y Sokol

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Table 1. Theoretic viewpoints for the study of enterpriseM

ICR

O(i

ndiv

idua

l lev

el)

VIEWPOINT

ECONOMIC PSYCHOLOGICAL SOCIO-CULTURAL MANAGERIAL

The enterprise functionTheory of the Personality Theory of X-efficiency

like the fourth productionCharacteristics

Margination Theoryof Leibenstein

factor

Theory of FirmPsychodynamic theory Parental Role Models Managerial Behaviour Theory

Formationabout management

Personality Network Theory Enterprises Star-up Model

Network Theory New Enterprises

Incubator TheorySuccess Models

Transaction Cost TheoryI+D New Projects Models

Evolutionary Theory (“Corporate Entrepreneurship”)

Economic DevelopmentTheory of Weber

Economic Development Entrepreneur Social Schange TeoryTheory of Schumpeter Theory of Kirzner

The Population EcologyPerspective

Institutional Theory

ME

SO(l

evel

of

the

com

pany

)

MA

CR

O(g

loba

l lev

el o

fth

e ec

onom

y)

AN

ALY

SIS

LE

VE

L

Source: Veciana (1999: 16).



(1982) or Veciana (1999), without denying this affirmation, state that it isemerging new entrepreneur collectives (for exemple, Silicon Valley and Rute128). The managerial viewpoint maintains that the creation of companies isthe result of a rational decision process whose objective is to create. Thisviewpoint does not attempt to explain the causes of the creation of newcompanies but rather to generate knowledge and detail practical models.

2.2. Recent studiesThe study that has been carried out in this work is in response to the needto understand in some depth the enterprising situation within Spain, sothat the conclusions arrived at might help to make advanced decisionsregarding the observed processes and finally reinforce the enterprisingactivity of our country. In order to achieve this we have taken as a pointof departure figures from the Autonomous Regions (henceforth abbrevia-ted to AARR) of the Economic Activity Tax (henceforth abbreviated toEAT) referring to the formation and dissolution of companies, both cor-porations and individual firms, in the period 1999-2003 – these figureshave been provided by the Spanish Agency of Administrative Taxation(SATS). Our two objectives have been the following: (1) To carry out asmall study of entrepreneurship in Spain by investigating the propensitytowards the enterprise birth and death created by only one person –soleproprietors– or created under other juridical forms; and (2) to analyse thestate of entrepreneurship of the distinct Spanish Autonomous Regions inrelation to the Spanish mean, through an analysis of conglomerates

The extent of the observations and facts considered makes the presentstudy a completely novel initiative in Spanish territory, even though inother geographic spheres and for other motives some extremely interestingstudies regarding enterprise have been carried out. Taking into account thegeographical variables, the study carried out by Mitchell (2003) is interes-ting in relation to the reasons and motivations that can ignite enterprisingactivity in Africa; Uhlaner’s (2003) study about enterprising activity inItaly, including references to other European countries; the studies of Kell-

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man, Roxo and Shachmurove (2003) that make a detailed analysis of thecauses of the failure of enterprising activity in Sub-Saharan Africa; Hara-da’s (2003) study that includes the key issues – size of company as well asthe sex and age of the entrepreneur – in order to become a successfulentrepreneur in Japan; Hiskey’s (2003) study about the politics that is nee-ded to initiate the restructuring of business through enterprise in Puerto deVera Cruz in Mexico; the study of Friar and Meyer (2003) that includesthe variable dimension in order to investigate where enterprising activityought to develop in Boston; the study of Noronha et al (2003) whichmakes a complete study of enterprise taking into consideration thoseregions of southern Europe; the study of Morales and Pena (2003) inwhich they explain the factors which create the prolific creation of com-panies in the Basque country’ or the study of Todtling and Wanzenböck(2003) which analyses the regional differences that affect the process ofbeginning new businesses or business activities in Austria.

The last study cited above is interesting because it has much in com-mon with the aims of our current investigation. These aims involve usingSpain as a territorial base and the autonomous region as a point of com-parison. Together this creates differences that are large enough to enablecomparative and specific analyses of the enterprising activity being carriedout in each case, as well as allowing us to predict trends and make deci-sions regarding the consideration of other macroeconomic variables. InTodtling and Wanzenbök, Austria is used as a territorial base and as apoint of comparison seven areas are used which, due to their structure,allow conclusions to be drawn about the country’s enterprising initiatives.The seven areas are: Vienna, provinces and cities of medium size, purelyindustrial areas; old industrial areas; rural industrial areas; tourist areasand purely rural areas. With regard to these seven areas, the evolution ofvariables related to enterprise is studied. Such variables are: the activitysector, the number of entrepreneurs, the manner in which the activity wasinitiated, the distribution of capital, cooperative base, the qualification ofthe members, the managerial experience and the possibility of survival.

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There are other studies regarding enterprise that take into considera-tion the activity sector in which the companies operate. A large number ofthem are applicable to the advanced technology sector, like that of Zhang(2003) and Silicon Valley; or that of Elfring and Hulsink (2003) carriedout with regards to the most important technological companies in Nor-way. In view of the most important repercussions that these studies mayhave for the future it is necessary to mention those studies whose object itis to motivate or animate young people in the initiation of new businessactivities (Meager, Bates, Cowling, 2003). Also worth a special mentionare the enterprising initiatives which are based in universities, where, fromour point of view, the enterprising ambition of students should gain mostvigour (Pirnay, Surlemont, Nlemvo, 2003). Thus it is extremely interestingto analyse the enterprising activity of the University of Santiago de Com-postela, which has become in a short space of time a fine example of uni-versity entrepreneurship throughout the world.

Two important factors are altering the enterprising sphere on all levels:the concern for sustainable development and the management of diversity.Naturally, enterprising activity is increasingly conditioned by these twoaspects which ought to be considered with regards to any current decisionsand more importantly in any future decisions. Some studies have alreadydone this. The studies of Seidl et al (2003), Musyck (2003) and List et al(2003) consider environmental variables to be crucial when creating busi-nesses in the Swiss market, the region of Freiberg (Germany) and NewYork. On the other hand, the studies of Kloosterman (2003), Collins(2003), and Mitchell (2003) believe that ethnic and cultural variables aremore significant in the Norwegian market, in Australia and South Africa.

3. Study of entrepreneurship in Spain

3.1. Analisys of situationFollowing on from this we will describe the evolution of entrepreneurshipin Spain from 1998-2003. The total number of companies formed duringthe period studied has not undergone great changes (Graph 1). However,

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it can be seen that in only two of the five years that have taken into con-sideration (1999 and 2002) has the number of companies formed increa-sed with regards to the year 1998: by 3.44% and 3.47% respectively.

The year 2003 does not appear to have been very active either in termsof entrepreneurship in Spain. We can see that the number of companiesformed up to the 15th of December is considerably inferior to that of 2002and approximately 8% less than in 1998. It can be observed that in 2000and 2001 a smaller number of companies are formed. This could be partlydue to the economic crisis that Europe has suffered since 1999 and whichhas been exacerbated by the events of September the 11th together with thecrisis of companies denominated “.com”. Taking into account the com-pany dissolutions that have been suffered in the same period we can seethat they follow an upward trend. This supports the theory of an econo-mic crisis during the analysed period. The most worrying figure is recor-ded in 2001 when the net increase (total enterprise births minus totalenterprise deaths) hardly comes close to the 200,000 licenses.

As can be seen in Graph 1, 2002 was a year in which a greater num-ber of companies were dissolved according to the IAE register, more thandouble that of 1998. If we compare the enterprise birth created by only

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Graph 1. Total number of enterprise birth and death per year

326.902 338.147

64.001

Enterprise birth Enterprise death

326.317 321.417 338.239300.205

86.160133.583124.251103.971



one person –sole proprietors– and enterprise birth created under otherjuridical form, the firsts present a higher percentage that oscillates betwe-en 60% and 65% of the total amount of companies formed (graph 2).

This seems logical given that the business structure is formed largely bysmall and medium companies, for individual and professional societies.

The situation is identical when it comes to companies that have beendissolved. We can see that the number of enterprise death (sole proprietor)is almost triple the number of enterprise death (other juridical forms)(graph 3).

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Graph 2. Percentage of enterprise birth (sole proprietor and otherjuridical forms) according to the annual total of companies birth

36,2

0%

37,0

6%

38,7

6%

37,4

3%

38,1

2%

34,5

1%65

,49%

61,8

8%

62,5

7%

61,2

4%

62,9

4%

63,8

0%

1998 1999 2000 2001 2002 36,20%

Sole proprietor Other juridical forms



In this case and in relation to the total number of companies deaths,the percentage of those enterprise death (sole proprietor) reaches values ofbetween 70% and 78%. Thus there are a greater number of dissolutionsin individual, autonomous or professional companies than in companiesof one or two associates. This distributive trend, like that observed in theenterprise birth, remains constant throughout the period under observa-tion.

3.2. Cluster Analysis

3.2.1. Description of MethodThe following part of the study focuses on an analysis of the differentAARR in relation to the Spanish mean by closely examining conglomera-tes. This is also known as a cluster analysis which is facilitated by the useof the statistical program SPSS 12.0.

The data refers to all the Spanish AARR’s except the Basque countryand Navarre: (AN) Andalucia, (AR) Aragon, (AS) Asturias, (BL) Balea-

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Graph 3. Percentage of enterprise death (sole proprietor and otherjuridical forms) according to the annual total of companies death

21,5

9%

24,8

3%

29,0

9%

28,9

5%

25,6

9%74

,31%

71,0

5%

70,9

1%

75,1

7%

78,4

1%

1999 2000 2001 2002 2003

Sole proprietor Other juridical forms



ric Islands, (CN) Canary Islands, (CB) Cantabria, (CL) Castile and Leon,(CM) Castile of the Mancha, (CT) Catalonia, (CV) Region of Valencia,(EX) Extremadura, (GA) Galicia, (MT) Madrid, (MC) Murcia and (RI)Rioja. The data regarding the Basque Country and Navarre remains out-side the realms of this study because they are not based in the SATS andhave delegated the powers of the EAT to their respective AARR mem-bers.

The cluster analysis is a technique which aims to group togetherobjects based on a multivariate profile. The required prerequisite is for theconglomerates or groups formed to be as homogenous as possible in them-selves (with regards to a previously determined selective criteria) and asheterogeneous as possible between one another (Hair et al., 1999: 492;Cea, 2002: 227). By using a cluster analysis in this case we hope to disco-ver which regions behave similarly in relation to the enterprise birth anddeath created by only one person –sole proprietors– or created under otherjuridical form in the period ranging from 1999 to 2002. We thus seek tolimit the information in relation to this period so that we can observe howthe enterprising activity has been affected. The following classificationshave been used: enterprise birth – sole proprietor (AF); enterprise birth –other juridical forms (AJ); enterprise death – sole proprietor (BF) andenterprise death – other juridical forms (BJ). All are represented accordingto the number of companies formed and dissolved for every 1,000 inhabi-tants.

We will carry out an analysis of each year by observing how the regionsgroup themselves together and evolve in the period under consideration.In order to carry this out, each year a combination of hierarchical andnon-hierarchical processes has been used (Hair, 1999; Luque, 2000: 167;Cea, 2002: 247; Levy & Varela, 2003: 435): (1) A hierarchical method(Ward method) is applied with the aim of finding out the number of con-glomerates that can be formed in the matrix of data to locate a initial cen-troid. (2) The outcome of the hierarchical method is taken as a initial cen-troid for the non-hierarchical method. The latter helps to adjust or to a

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greater extent determine the constitution of the conglomerates that havebeen obtained through the employment of the hierarchical method. In thiscase is applied the K-means method.

Thus, as a first step to examination of the cluster of regions, a factorialanalysis has been applied in which, together with the annual data, two fac-tors are calculated which are then employed in the analysis of conglome-rates.

3.2.2. Analysis of the resultsTable 2 summarises the two factors calculated each year with the dataregarding the enterprise birth and death created by only one person –soleproprietor– or created under other juridical form for every 1,000 inhabi-tants. Included are the correlation coefficients between the variables andthe factor. Highlighted in black are the coefficients that reflect the asso-ciation between variables and the factor that represents them. Added tothis is the percentage of total variance which is explained by the factorsthat have been extracted each year.

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Tabla 2. Factors

YEAR 1999 2000 2001 2002

FACTOR 1 2 1 2 1 2 1 2

AF 0.261 0.952 0.861 0.431 -0.027 0.986 0.881 0.291AJ 0.907 0.139 0.987 0.040 0.679 0.677 0.933 0.275BF 0.797 0.442 0.199 0.976 0.955 0.135 0.215 0.958BJ 0.922 0.355 0.843 0.502 0.990 -0.019 0.588 0.745

% OF VARIANCE 90.5% 96.5% 95% 91.8%

Instead of providing a dendrogram for all the periods considered, wehave only included one for the final period, the year 2002, comparing itwith the results obtained in the previous years. In this particular year the



most relevant variables in the first factor are those related to the birth ofa particular enterprising activity, created by only one person –sole pro-prietor– (AF) or created under other juridical form (AJ). This factor islabelled the CREATION OF COMPANIES. The most relevant variablesof the second factor are those relating to the death of business activitiesin relation to enterprises that were created by only one person –sole pro-prietor– (BF) or created under other juridical form (BJ). This factor islabelled DISSOLUTION OF COMPANIES. The regions’ factorial figu-res are the starting point in the analysis of hierarchical conglomerateswith which the following dendrogram has been obtained for the year2002 (figure 1).

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Figure 1. Dendogram (Hierarchical Analysis, Ward’s method)

CASE 0 5 10 15 20 25Label Num + - - - - - - - - - + - - - - - - - - - - - - - - - - - - - + - - - - - - - - - + - - - - - - - - - +

CB 6GA 12

CL 7

CN 5

CV 10

AN 1

MC 14

RI 15

AR 2

AS 3

EX 11

BL 4

CT 9

CM 8

MT 13



The preferred solution is formed by three conglomerates. The finalcomposition of the groups has been effected by the non-hierarchical pro-cedure of K-averages. This does not alter the initial formation of thegroups except in the case of 1999, when Catalonia changes its conglome-rate in relation to the formation of groups in the hierarchic process.

The three resulting conglomerates from 2002 are the following:

CONGLOMERATE 1. The first conglomerate is formed by the AARRof Castile of the Mancha and Madrid. This conglomerate has a greateraverage score in relation to the first factor (1.7). We ought to rememberthat the most relevant variables in the first factor are those relating to thebirth of business activities (the creation of companies), created by only oneperson –sole proprietor– (AF) or under other juridical forms (AJ). Thevariable in relation to the AJ (0.933) carries more significance within thefactor than the AF variable (0.881). Therefore those AARR that constitu-te conglomerate 1 stand out as being highly developed enterprising regionsespecially with regards to the creation of enterprises under other juridicalforms (graph 4).

CONGLOMERATE 2. The second conglomerate is formed by theAARR of the Balearic Islands and Catalonia. This conglomerate has a gre-ater average score in the second factor (1.68). The most relevant variablesin the second factor are those relating to the enterprise death whetherenterprise that were created by a only one person (BF) or enterprise thatwere created under other juridical form (BJ). The variable in relation to BF(0.958) carries more significance within the factor than the BJ (0.745).Therefore those AARR that constitute conglomerate 2 stand out asregions which, although they have a high propensity to create companies,display a high level of enterprise death, especially in relation to individualor autonomous firms. This means that the net balance (total enterprisebirths minus total enterprise deaths) is reduced (graph 4).

CONGLOMERATE 3. The third conglomerate is formed by the rest ofthe AARR: Cantabria, Galicia, Castile and Leon, the Canary Island, the

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Region of Valencia, Andalucia, Rioja, Aragon, Asturias and Extremadura.This conglomerate is characterised as a group that is less active when itcomes to creating enterprises and the effect of enterprise death is minimal(graph 4).

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Graph 4. Analysis of the conglomerates

6

5

4

3

2

1

0

AF AJ BF BJ

Conglomerate

123

MEAN

OF

CONGLOMERATE

The composition of the regions’ groups in the previous years revealsdivergences from the year 2002. The situation of the AARR of Madrid,the Balearic Islands and Catalonia changes to a certain extent in 2002, for



up to this year they appear together in conglomerate 1. Factor 1 reachesan outstanding level in this conglomerate throughout the period and, ascan be seen in table 2, both the variables in relation to the AJ and BJremain quite well represented by this factor from 1999 to 2001. We couldtherefore conclude that the four years analysed are characterised in theseregions by the continual births and deaths of enterprises. Apart from theyear 2000, the creation of enterprises by only one person does not parti-cularly stand out whereas their death most certainly does. Finally, in 2002,there is a tendency in the region of Madrid to create enterprises while inCatalonia and the Balearic Islands there is a tendency to dissolve enterpri-ses that were created by only one person –sole proprietor–. With regardsto conglomerate 3, the majority of the regions in the group remain in thesame conglomerate throughout the entire period studied. It is characteri-sed throughout the period by minimal changes whether in the creation ordissolution of enterprises. However there are three significant changes in2002:

1. The absence of the region of Castile which goes on to form part ofconglomerate 1 with Madrid.

2. The presence of the region of Extremadura which in the previousyears formed conglomerate 2 by itself, except in 1999 when it wasjoined by Asturias. This conglomerate is characterised by an alter-nation in the birth and death of enterprises created by only one per-son –sole proprietors–.

3. In 2000 and 2001, the region of Valencia and the Canary Islandsform part of conglomerate 1 together with Madrid, Catalonia andthe Balearic Islands. This conglomerate is characterised by varia-tions in the birth and death of enterprises created under other juri-dical form.

In 2002 Galicia –our region–, as part of conglomerate 3, has the lowestrecord of enterprises formed. It is below the conglomerate mean both ofAF and AJ. With regards to the AF, Galicia is only ahead of Aragon, Cas-

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tile and Leon. The situation varies slightly with regards to the AJ as Gali-cia improves its position in the conglomerate ahead of Asturias, Canta-bria, Castile and Leon and Extremadura (graph 5). In previous years thesituation is similar although from 2001 onwards one can see a slight reco-very in the birth of enterprises under other juridical form.

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Graph 5. The position of Galicia in its conglomerate (year 2002)

4. ConclusionsThe enterprising incentive is defined when a business activity is initiated,when a company is created, by only one person or under other juridicalforms.

In Spain, unfortunately, the ideal trend – that is, for the number ofcompanies formed to increase while the number of companies dissolveddecreases – is not sustained throughout the period that has been studied.

The companies created suffer small ups and downs throughout theperiod from 1998 to 2003. The number of companies created increases

5,40

5,20

5,00

4,80

4,60

4,40

4,20

4,32

2,44

4,00

CV CN AN MC AS RI EX CB GA AR CL

Sole Propietor

3,00

2,50

2,00

1,50CV CN AN MC AS RI EX CB GA AR CL

Other juridical forms



only in two periods – 1999 and 2002. The number of companies dissol-ved rises throughout the period studied meaning that the net increase hasdecreased as the years have gone by.

Through the analysis of conglomerates or clusters, a classification ofthe AARR has been carried out from a starting point of four variables,two related to the creation of new companies (AF and AJ) and two rela-ted to the dissolution of companies (BF and BJ). An attempt has beenmade to make the groups as homogenous as possible individually and asheterogeneous as possible in relation to each other.

The first conglomerate involving Castile of the Mancha and Madridand is highly involved in enterprise. The second conglomerate involvingthe Balearic Islands and Catalonia has the highest levels of company deathand the third conglomerate is made up of the rest of the AARR. This lat-ter conglomerate is formed by AARR that are inactive in terms of enter-prise birth. Galicia is situated in the third conglomerate as a communitythat is below average in the creation of enterprises.

The application of this type of multivariate analysis has facilitated arapid and simple classification of the Spanish AARR. The next step is totry to increase the number of AARR that display a strong and sustainableenterprising spirit and to reduce those that fall into the opposite categoryby changing the original enterprising ideal that evolved in their day.

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