It is well known that the level of entrepreneurial activity, for instance as expressed as the percentage of owner/managers of businesses relative to the labor force, differs widely across countries (Van Stel, 2005). This variation is related to differences in levels of economic development and also to diverging demographic, cultural, and institutional characteristics (Blanchfl ower, 2000; Wennekers, 2006). There is evidence of a U-shaped relationship between the level of business ownership (self-employment) and per capita income (Carree, Van Stel, Thurik, & Wennekers, 2002; Wennekers, Van Stel, Carree, & Thurik, 2010). Recent research within the framework of the Global Entrepreneurship Monitor (GEM) using the rate of nascent entrepreneurship or the prevalence of young enterprises shows the same phenomenon (Suddle, Beugelsdijk, & Wennekers, 2010; Van Stel, Carree, & Thurik, 2005; Wennekers, Van Stel, Thurik, & Reynolds, 2005). The meaning of this U shape is much disputed because it is merely a stylized fact awaiting an explanation using the double causal relationship between entrepreneurship (indicated by business ownership rates, self-employment rates, or nascent entrepreneurship rates) and the level of economic development (Thurik, Carree, Van Stel, & Audretsch, 2008). Nascent entrepreneurship also reveals a wide-ranging diversity across nations and even regions. An explanation for this variation is needed as many governments attach high hopes to the positive effect of entrepreneurship on economic growth and, as a consequence, try to promote new business start-ups.