Abstract
Coinciding with the rise in economic inequality (EI) is a renewed scholarly attention to the causes and impacts of the distribution of wealth within a society. Drawing on 16 years of data from the Global Entrepreneurship Monitor and other national-level datasets, we spotlight a strong implicit, yet understudied, relationship within this domain, that of EI and entrepreneurial activity. Our results support an inverted-U relationship between EI and opportunity-based entrepreneurial activity and a positive relationship between inequality and necessity-driven entrepreneurial activities. Furthermore, the fear of failure and perceived opportunities play a magnified role in predicting entrepreneurial activity as inequality increases.
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