Empirical assessment of external enablers on new venture creation: the effect of technologies and non-technological change in Iran digital entrepreneurship

Abstract

Purpose The purpose of this study is to investigate the influence of external enablers (EEs) – factors that are exogenous and independent of the actors – on the rate of new venture creation (NVC) in digital entrepreneurship. Design/methodology/approach The authors established a unique data panel comprising all formal digital entrepreneurial firms and startups licensed to operate in the digital space from Iran E-Commerce Development Center, from 2012 to 2022, totaling 124,751 businesses classified in 16 sectors. The authors used Poisson regression with robust standard errors to analyze the relationship between external factors and NVC. Additionally, the authors segmented the data set along demographic, spatial and sectoral subsets to compare them using the average treatment effect model. Findings This analysis confirms that technology readiness and technology intensity, as EEs, significantly boost digital entrepreneurship in a developing country. The authors also explored the impact of the COVID-19 pandemic as a natural environmental enabler and explored its facilitating effects and the enduring impacts post-pandemic. Moreover, the authors assessed the heterogeneous impact of the EEs across different groups and derived implications for each. Research limitations/implications While this study is comprehensive, it focuses exclusively on formal digital entrepreneurship within a single developing country, namely, Iran. Although the authors explored various EEs, they did not address all possible types, highlighting the potential for further research in other entrepreneurial sectors for a comparative analysis of EEs. Practical implications The initial findings affirm that most NVC in Iran stems from external factors. These findings have been widely used by policymakers to define the goals and objectives of EEs concerning their nature and impact. This research reveals that EEs have heterogeneous effects on NVC, varying across different characteristics such as gender, geography and industry sectors. The results of this study suggest that governments should reassess the role of “macro” policies to support vulnerable groups. EEs disproportionately benefit male founders, which exacerbates existing gender gaps and necessitates ongoing attention and intervention. Additionally, EEs have diverse impacts across industries, potentially favoring some while disadvantaging others because of varying social, cultural and economic factors. Originality/value NVC, central to entrepreneurship in developing nations, encounters numerous challenges, yet the role of EEs remains underexplored in this context. EEs are opportunities that are not limited to a subset of entrepreneurial actors; they act as levers influencing a wide range of entrepreneurial activities. This research distinctively investigates the empirical impact of EEs in a Middle Eastern developing country context, contributing to the growing literature on the external enablers framework.