Abstract
While prior research has uncovered the impact of some national institutions on the general level of entrepreneurship in a country, there is still limited knowledge about the role of the institutional arrangements of a country on specific types of entrepreneurial activities, namely necessity versus opportunity entrepreneurship. To address this gap, we conduct a multilevel analysis using a sample of 10776 individuals from 55 diverse countries to examine how institutional factors (i.e., countries’ institutional profile and national innovation system) impact entrepreneur’s choice of pursuing a specific type of entrepreneurship. Using Hierarchical Linear Modeling, the findings indicate that neither institutional profile nor national innovation system (NIS) elements solely determine the choice between opportunity motivated entrepreneurship (OME) and necessity motivated entrepreneurship (NME); however, OME tends to be higher in instances when supportive institutional arrangements (regulatory, normative, and cognitive) toward entrepreneurship get coupled with national innovation system factors. The study contributes to a more nuanced understanding of embedded agency within the institutional logics perspective. It bridges the literature on individual and institutional antecedents of entrepreneurship. Further implications for theory and practice are discussed.
Highlights
Do institutions have equal impact on everyone in society? Under what circumstances individuals may act differently in terms of choosing a certain type of entrepreneurial activity? Which individuals are more likely to start a business to take advantage of an un-exploited or under-exploited opportunity rather than starting a business merely out of necessity? These are key issues for policymakers striving to promote entrepreneurship due to its significant economic outcomes
Using Hierarchical Linear Modeling, the findings indicate that neither institutional profile nor national innovation system (NIS) elements solely determine the choice between opportunity motivated entrepreneurship (OME) and necessity motivated entrepreneurship (NME); OME tends to be higher in instances when supportive institutional arrangements toward entrepreneurship get coupled with national innovation system factors
Studying entrepreneurial choice in 55 countries, we find that in countries where the national innovation system components get coupled with the supportive institutional profile toward entrepreneurship, potential entrepreneurs are more likely to engage in opportunity rather than necessity motivated entrepreneurship
Summary
Do institutions have equal impact on everyone in society? Under what circumstances individuals may act differently in terms of choosing a certain type of entrepreneurial activity? Which individuals are more likely to start a business to take advantage of an un-exploited or under-exploited opportunity rather than starting a business merely out of necessity? These are key issues for policymakers striving to promote entrepreneurship due to its significant economic outcomes. The main focus of the institutional logics perspective [3, 4] is on how broader belief systems may shape the cognition, behavior, identity, and goals of economic actors Under this view, entrepreneurs demonstrate individual agency subject to complex systems of institutional forces which may lead them to perform differently in terms of engaging in business activities [5]. This study has several implications for the understanding of institutions, entrepreneurship, and opportunity recognition It further demonstrates the value of the institutional logics perspective in explaining the nature of how institutions impact individuals. This study has important policymaking implications for economic development It does so by highlighting conditions in which national innovation system factors have a stronger impact on potential entrepreneurs‟ choice. Individuals‟ behaviors are formed based on the logics they are surrounded with which are in turn shaped by: (a) the degree to which a particular institutional logic has been historically institutionalized within a given society (b) the degree to which agents are embedded in fields consisting of conflicting logics and (c) the situational context(s) (i.e. the immediate time and place) in which individuals find themselves [4]
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