Entrepreneurial Experience and Opportunity Exploitation: How Does the Context Matter?

Abstract

We develop and test a multi-level framework postulating that both property rights institutions and entrepreneurial opportunities moderate the positive influence of prior entrepreneurial experience on opportunity-motivated entrepreneurship. We analyze this framework by exploiting a hierarchical dataset that spans 92 countries and a period of 16 years. Using the multi-level logit regression in conjunction with the instrumental variables approach, we find that the exogenous variation in property rights protection has both a direct and an indirect—through entrepreneurial experience—positive influence on the likelihood of becoming an opportunity-motivated entrepreneur. On the other hand, we find that while entrepreneurial opportunities increase the odds of observing opportunity-motivated entrepreneurs, they nevertheless weaken the positive effect of entrepreneurial experience on the likelihood of becoming an opportunity-motivated entrepreneur.