Opportunity-driven Entrepreneurship Research Articles

Gender inequality and the entrepreneurial gender gap: Evidence from 97 countries (2006–2017)

Although it seems almost a stylized fact that females are less likely than males to start new ventures, closing this gender gap is essential to foster sustainable economic growth. In this study, we analyze whether gender inequality, as measured at the country level by the World Economic Forum since 2006, is associated with the gender gap in entrepreneurship. By analyzing country-level information about gender inequality (97 countries) in combination with individual-level data from the Global Entrepreneurship Monitor (1,905,665 individuals) from the years 2006 to 2017, we find that in more gender equal countries involvement in total early-stage entrepreneurial activity (TEA) is higher. Gender inequality moderates the effect of gender on TEA, by almost closing the gender gap in entrepreneurship in the most gender equal countries. We show that gender inequalities in economic participation and opportunity as well as in political empowerment are the main drivers of this interaction effect. We find similar patterns when distinguishing between opportunity-driven and necessity-driven TEA. With opportunity-driven entrepreneurship as a potential vehicle for the economic empowerment of females, our study highlights the role of policies stimulating gender equality.

Entrepreneurial Well-being: An Exploratory Study for Positive Entrepreneurship

Abstract Given the limited studies in the literature to understand entrepreneurial well-being, in this study, we aimed to answer the questions “what kind of resources does an entrepreneur need to experience a high level of well-being?” and “what would be the possible consequences of an entrepreneur’s well-being?” To elaborate the entrepreneurial well-being concept further, we conducted in-depth interviews with 20 male, married, and opportunity-driven entrepreneurs operating technology enterprises in Turkey. Based on the thematic analysis of the interviews, we ended up with six resources for their well-being (i.e., individual factors, family life, entrepreneurial success, network, the team, and investment) and five areas on which their well-being is impactful (i.e., individual, family, societal, employees, and business). Despite its limitations, our study contributes significantly to entrepreneurial well-being literature and paves the way for further research.

Do foreign investment and economic freedom matter for behavioral entrepreneurship? Comparing opportunity versus necessity entrepreneurs

This paper provides new evidence on how outward and inward foreign direct investment (FDI) and economic freedom influence opportunity and necessity entrepreneurship in emerging markets. Studying 38 emerging economies, the empirical results show that both types of FDI exert opposite spillover effects on opportunity and necessity entrepreneurship and that greater economic freedom increases inward FDI and reduces outward FDI, thereby enhancing entrepreneurial activities. Additional analysis shows that the influence of FDI on entrepreneurship development depends on the dimensions of economic freedom. In particular, better economic freedom allows FDI to increase opportunity-driven entrepreneurship and decreases necessity-driven entrepreneurship. Policy and practical implications are also discussed.

E-Platform-Enabled Transnational E-Entrepreneurship

This paper examines transnational e-entrepreneurs enabled by e-platforms through the lens of entrepreneurship process theories. The authors argue that transnational e-entrepreneurs engaging in necessity-driven e-entrepreneurship have been neglected in current related literature. This paper first proposes that transnational e-entrepreneurship research should be conducted in a framework of cross-country e-entrepreneurial ecosystem that combines host- and home-country entrepreneurial ecosystems and digital ecosystems. Then the framework was tested by case studies and proved to be valid. The paper found that e-platforms enabled necessity-driven transnational entrepreneurs to operate in the same manner with opportunity-drive entrepreneurship. The authors also conclude future research themes for transnational e-entrepreneurship study should separate necessity-driven and opportunity-driven entrepreneurs. It suggests the policymaker needs to emphasize necessity-driven e-entrepreneurs.

Manufacturing firms and entrepreneurial dynamics in less developed economies: Kosovo in comparative perspective

This paper examines patterns of dynamics of manufacturing firms in Kosovo's economy over the period 2008-2017. The findings for Kosovo are discussed and analysed in the context of comparator countries at different economic levels. The findings show that although the number of incumbent manufacturing firms in Kosovo is almost half less than in comparator countries, there is a vibrant entrepreneurial environment which is supported by young and very small sized firms that are able to survive beyond the age of five. An important pattern that seems to be specific to the country is the rate of exit firms, which is significantly lower than all other reference countries. Although these results support the prevalence of subsistence and necessity-driven entrepreneurship in Kosovo, survival analysis results hint that there may be scope for opportunity-driven entrepreneurship if particularly strong sectors are supported using recent advantages of digitalisation and greening agenda in the economy.

Gender gaps in opportunity-driven entrepreneurship: the impact of human and social capital

PurposeThe purpose of this study is to investigate gender gaps in opportunity-driven entrepreneurship and illuminate the underlying mechanism of why women are less likely to create ventures in order to take advantage of the opportunity than men.Design/methodology/approachBy drawing on human/social capital theory and expanding extant gender-related entrepreneurship literature, this study addresses how human and social capital mediates the relationship between gender and opportunity-driven entrepreneurship. A sample of 115,367 individuals across 62 countries drawn from the Global Entrepreneurship Monitor of 2016 was examined using multilevel logistic regression and Karlson-Holm-Breen (KHB) mediation analysis.FindingsFindings of this study demonstrate that women’s lack of entrepreneurial relevant knowledge and skills, intrapreneurship experience as well as social networks with other entrepreneurs contribute to women’s less likelihood of engaging in opportunity-driven entrepreneurship than their male counterparts.Originality/valueCompared to previous research mainly investigating macro-level determinants, this study further explores the explanatory factors affecting gender gaps in opportunity-driven entrepreneurship from the individual level. The findings provide an implication for public policy and give a direction to rethinking how to promote opportunity-driven entrepreneurship, especially for that led by women.

New knowledge and regional entrepreneurship: the role of intellectual property protection in China

ABSTRACT This research examines the relationship between intellectual property protection (IPP), new knowledge and regional entrepreneurship development in transition China. Using provincial-level panel data collected over China from 2000 to 2017, consistent with conventional wisdom, we find that more investment in new knowledge is the key to encouraging regional entrepreneurship. IPP and entrepreneurship present a U-shaped relationship, that is, IPP first promotes entrepreneurship but impedes entrepreneurship when it exceeds a certain point. IPP negatively moderates the positive effect of new knowledge on entrepreneurship and there are heterogeneous effects in different industries and geographical clusters at different levels of entrepreneurship. New knowledge has a significant incentive effect on necessity-driven entrepreneurship, but not on opportunity-driven entrepreneurship. The moderating effects of IPP on the relationship between new knowledge and necessity-driven entrepreneurship and opportunity-driven entrepreneurship are negative and positive, respectively. These findings contribute to understanding the impact of IPP on entrepreneurial activities in emerging economies.

Entrepreneurship Recovery in Romania after the Great Recession. A Dynamic Spatial Panel Approach

Entrepreneurship plays a key role in transforming the economy and society by stimulating economic development, testing innovative ideas, creating new jobs, and by enriching the quality of life and human existence. Entrepreneurship dynamics depend upon a series of local and national economic factors, but are also affected by the international environment, such as the current COVID-19 pandemic. Statistical data show that new businesses are created at a slower rate during an economic crisis, when the economic climate is harsh, and business opportunities are scarce. Nevertheless, there are local differences in the reaction to crises, and new business formation tends to decline with variable intensity from one region to another, even in the same country. The crises are acting as a trigger for some opportunity-driven entrepreneurs, and resilient regions can thrive even in times of crisis or recover faster after a depression. To capture spatial interactions, as well as spatial short- and long-term effects, the method employed in our analysis relies on the estimation of dynamic spatial panel models. We tested the potential impact of a large variety of social and economic indicators on the creation of new firms and found that the most consequential factors of influence are the economic crisis (expressed through a binary variable), GDP per capita, FDI per capita, inflation, unemployment, and education. Our results convey a powerful policy message for both national and regional decision makers. We believe that, while putting entrepreneurial initiative to the test, the current COVID-19 crisis might act as a catalyst that leads to innovation and reshapes the economy and society.

Fostering entrepreneurship: the crucial role of monitoring schemes

PurposeThe purpose of this paper is to investigate the effect of government-led programs on the engagement of individuals in entrepreneurship.Design/methodology/approachThe authors worked with government-led programs of 16 European countries between 2003 and 2014 and were able to benefit from the 2008 natural experiment (i.e. the global financial crisis) to produce a robust investigation using a regression kink design (RKD).FindingsThe work shows that government-led programs that are designed to include monitoring schemes can significantly increase individuals' engagement in opportunity-driven entrepreneurship. The authors found that monitoring schemes do not have the same relevance for necessity-driven entrepreneurship. Therefore, the authors believe the difference occurs because monitoring design avoids problems related to moral hazard and adverse selection when it comes to individuals choosing whether to participate (or not) in government-led programs.Originality/valueWhile it is important for governments to provide an enabling environment for entrepreneurship, this study showed that not all types of public program have positive results. In fact, it has been demonstrated that poorly-designed programs can actually decrease the likelihood of individuals engaging in entrepreneurial activities. The efficiency of programs is substantially improved, however, when they are designed to include monitoring schemes.

PUBLIC POLICIES TO SUPPORT ENTREPRENEURSHIP: DO THEY CONTRIBUTE TO STRENGTHEN SMES SECTOR?

for the development of a dynamic and innovative small and medium enterprises (SME) sector is widely recognized in economic theory and practice. Entrepreneurship do not only contribute to productivity improvements, but it could also help finding practical solutions to social and environmental challenges, climate change, global economic or health crises. However, despite this widespread recognition, entrepreneurship relatively recently becomes a concern for the decision-makers’, and in many cases the support measures are partial, difficult to understand and access, marked by bureaucracy and over-regulation, even in developed countries. Therefore, the active involvement of policy makers, the contribution of public or private support structures, education, public awareness of the benefits of entrepreneurship and small and medium-sized businesses are essential. Building policies and strategies to support entrepreneurship starts from objective characteristics, but it must be adapted to the specific conditions of each country, the profile, size and structure of the business sector in that country (or region) in order to enhance its contribution to development goals. In our article we state that public policies for entrepreneurship must find a balance between stimulating the new firms’ creation, the size of existing ones and the impetus given to the sub-sector of dynamic, innovative companies, high growth-oriented. In the case of the developed countries analysed here, characterized by opportunity-driven entrepreneurship, the objectives of public policies to support entrepreneurship and SMEs should not excessively focus on setting up new companies. Rather, they must insist on creating a business-friendly environment and promoting an entrepreneurial culture, on the efficient functioning of support structures and networks, on encouraging the establishment and development of companies based on high knowledge, on strengthening and growth of the existing SMEs. Keywords: entrepreneurship; SMEs; public policy support, EU.

Governance Quality, Entrepreneurship and Economic Growth

Governance is a factor that affects new entrepreneurial activities and economic growth. However, the effectiveness of governance will vary depending on a country’s development level and entrepreneurial motivation. The main goal of this study is to use global entrepreneurship monitor (GEM) data and to apply a three-stage least squares (3SLS) regression to investigate the impact of six governance indicators on the entrepreneurship-growth nexus in 64 countries during 2010-2018. In addition, this paper describes whether the impact of governance indicators varies according to the country’s development stage. The results show that entrepreneurship and governance indicators have a significant impact on economic growth. However, depending on the development stage of the country, major differences can arise regarding the degree and nature of this relationship among countries. Specifically, the results show that entrepreneurship can promote economic growth in innovation-driven countries, but it cannot promote economic growth in factor- and efficiency-driven countries. In particular, the results show that opportunitydriven entrepreneurship (ODE) is only positively correlated with the economic growth of innovation-driven countries. In contrast, necessity-driven entrepreneurship (NDE) is negatively correlated with the economic growth of factor- and efficiency-driven countries. In addition, the survey results show that governance quality indicators contribute to entrepreneurial activities in the three groups of countries examined. This research contributes to the literature from a theoretical perspective (the use of good governance as an intermediary between entrepreneurship and growth) and a practical perspective (providing insights to improve the quality of governance to promote entrepreneurship and economic growth).

Necessity or opportunity? Government size, tax policy, corruption, and implications for entrepreneurship

Government size, corruption, and tax policy can influence allocation towards necessity or opportunity-driven entrepreneurship. Using a comparative multi-source sample across 52 countries during 2005–2015, we apply a mixed-process estimation of the simultaneously unrelated system of equations and unpack these heterogeneous and complex effects. Interestingly, our results show that the influence of tax policy and corruption on necessity and opportunity entrepreneurship depends on government size. Our results hold for numerous robustness analyses.Plain English summaryInstitutions matter for the choice of opportunity and necessity-driven entrepreneurship. Government size, the level of corruption, and tax policy directly affect entrepreneurs’ motivation and incentives. We study 52 countries during 2005–2015 to find out to what extent tax rate, corruption, and a range of government expenditure change the allocation of necessity and opportunity entrepreneurship. Our main implications are for (1) Research: Formal and informal institutions need to be considered when studying entrepreneurship allocation, particularly in an emerging and developing country context. Results suggest that the impact of the same institutional settings and informal institutions such as corruption on necessity and opportunity entrepreneurship is not uniform in size and scope and have different magnitude. The effect of government expenditure on necessity and opportunity entrepreneurship is not ubiquitous. (2) Management: The broader institutional context affects allocation of entrepreneurship, and potential entrepreneurs can consider how corruption in particular can affect them. (3) Policy: Policymakerscan measure the extent to which opportunity and necessity entrepreneurship are likely to change, when they make changes to tax policy, resources for public spending, and take anti-corruption measures.

Entrepreneurial Motivation, Psychological Capital, and Business Success of Young Entrepreneurs in the DRC

The proponents of the entrepreneurial motivation dichotomy have argued that opportunity-driven entrepreneurs are more likely to succeed and sustain in entrepreneurship, unlike people who start-up businesses out of necessity. However, disagreement still exists on why and under which conditions the former might outperform the latter. This research contributes to this debate by examining the mediation role of psychological capital in the relationship between entrepreneurial motivation and business success among youths. This study relied on a random sample of 295 young entrepreneurs surveyed from Bukavu in the Democratic Republic of the Congo (DRC). We applied partial least squares to analyze the hypothesized relationships. Evidence for the positive effect of opportunity-led motivation on psychological capital was found, but the findings did not support any direct effect of entrepreneurial motivation on business success. Instead, psychological capital positively and significantly mediated the relationship between entrepreneurial motivation and business success. This paper makes a distinctive new contribution to the understanding of the intriguing and controversial entrepreneurial motivation dichotomy—a business success relationship. To this end, we have found out that opportunity entrepreneurs have 3% more chance of succeeding in businesses compared to necessity entrepreneurs, because the former outperform the latter by 4% in the dimensions of psychological capital. This paper has new policy implications, as it reveals the great importance of psychological capital in promoting business success, thus reducing unemployment among youths, and offers tips from which psychological capital can be built or improved.

Economic regulation, opportunity-driven entrepreneurship and gender gap: emerging versus high-income economies

PurposeInstitutional environment plays a crucial role in determining the nature of entrepreneurship that prevails in an economy. In this paper, the authors address how business, labour and credit regulations contribute differently to both the overall prevalence of opportunity-driven entrepreneurship (ODE) and its gender gap in high-income and emerging economies.Design/methodology/approachOn the basis of an unbalanced panel of 41 countries over the period 2005–2016, the authors estimate system generalised method of moment models. The authors also perform an ordinary least square analysis to address gender differences in ODE.FindingsThe authors find that higher credit market liberalisation is especially associated with more entrepreneurship by opportunity. Nevertheless, while credit market regulation stands out as a key element to promote opportunity-based entrepreneurship in both high-income and emerging countries, in the emerging world business regulation is also largely related to the prevalence of opportunity entrepreneurship. In terms of gender gap, business and labour market freedom seem to exert an equalising effect on the divide in entrepreneurship by opportunity, specifically in emerging economies.Originality/valueFindings allow the identification of regulatory policy reform priorities to enhance the prevalence of ODE depending on the level of a country's development. They also identify which specific areas of economic regulation would speed up closing the gender gap in opportunity entrepreneurship.

Behavioral entrepreneurship for achieving the sustainable development goals

This paper extends prior studies on sustainable entrepreneurship by proving how the impact of entrepreneurial activity on achieving sustainable development depends on the behaviors and motivations of entrepreneurs. More precisely, we examine the influence of opportunity and necessity driven entrepreneurs on the economic, social, and environmental dimensions of sustainable development, which are constructed based on the 17 sustainable development goals (SDGs). Using data for twenty developing countries, we find from the long-run estimates that opportunity entrepreneurship has a positive impact on the three dimensions of sustainable development, whereas necessity entrepreneurship has a negative effect on the environmental sustainability dimension. We also find from the short and long-run causality analyses that opportunity-driven entrepreneurs granger cause the three dimensions in the short and long-run, whereas necessity-driven entrepreneurs do not have any effect on these dimensions. Finally, the authors make some suggestions for further research in this area.

The Broadband Penetration in Europe

In this article we estimate the determinants of broadband penetration in Europe. We use data from the European Innovation Scoreboard of the European Commission for 37 countries in the period 2010-2019. We apply Panel Data with Fixed Effects, Panel Data with Random Effects, WLS, OLS and Dynamic Panel. We found that the level of “Broadband Penetration” in Europe is positively associated to “Enterprises Providing ICT Training”, “Innovative Sales Share”, “Intellectual Assets”, “Knowledge-Intensive Service Exports”, “Turnover Share SMEs”, “Innovation Friendly Environment” and negatively associated with “Government procurement of advanced technology products”, “Sales Impact”, “Firm Investments”, “Opportunity-Driven Entrepreneurship”, “Most Cited Publications”, “Rule of Law”. In adjunct we perform a clusterization with k-Means algorithm optimized with the Silhouette Coefficient and we find the presence of three different clusters. Finally, we apply eight machine learning algorithms to predict the level of “Broadband Penetration” in Europe and we find that the Polynomial Regression algorithm is the best predictor and that the level of the variable is expected to increase of 10,4%.

Business startup motives and growth expectations of micro and small-scale entrepreneurs in Southern Province of Sri Lanka: the mediating role of entrepreneurial orientation

New venture creations are vital for the economic growth of any country because of its contribution to employment generation, employment generation, GDP, innovations and value additions. Though a large number of new venture creations occur every year in Sri Lanka, research findings highlighted that a smaller percentage was able to survive. Hence, the number of business establishments cannot be considered as a meaningful indicator of economic growth of the country and the high failure rate is a crucial issue. Past studies revealed that business startup motives effect on the business growth and Entrepreneurial Orientation (EO) plays a crucial role in directing the business towards success. Studies are lacking about the impact of business startup motives on the success and survival of newly established ventures and the mediating role of the EO on the relationship between start-up motives and new venture success. Therefore, the present study focused to reveal whether significant relationship exists between business startup motives and growth expectations; growth expectations between the necessity driven (NDEs) and opportunity driven entrepreneurs (ODEs); and whether EO plays a mediating role on the relationship between business startup motives and growth expectations. Independent Sample T test and Structural Equation Modeling were applied to test the hypotheses. Findings revealed that significant difference exists between the NDEs and ODEs in terms of proactiveness, competitive aggressiveness, and autonomy and no significant difference exists in growth expectations between the NDEs and ODEs. Entrepreneurial Orientation partially mediates the relationship between business startup motives and growth expectations.

The Impact of the Financial Crisis on Entrepreneurship Among Older Adults

Older adults are assumed to be more averse to uncertainty than younger adults as economics and psychology studies based on prospect theory and related risk aversion theories show. Indeed, compared to younger adults, older adults engage in a smaller share of entrepreneurship. Yet adults 50 and over make up a steadily growing group of entrepreneurs in the US, and the 2008 financial crisis has not slowed them down. Sociological perspectives on older adults’ entrepreneurship consider disruption in the structural conditions of the labor market as a result of the economic crisis and a culture of active aging to argue that older adults’ entrepreneurial behaviors stem from structural and cultural roots. Analyses using 2003-2015 individual-level data from the Global Entrepreneurship Monitor show that an economic downturn did not thwart older adults’ entrepreneurial activities any more than it affected younger adults’ activities. Further, older adults’ odds of planning to start a business and actually starting a business were higher after the crisis than before the crisis. A closer examination reveals that older adults with less wealth generally have higher odds of pursuing entrepreneurship than other older adults. Meanwhile, wealthier older adults have higher odds of pursuing opportunity-driven entrepreneurship. Evidence suggests that the saliency of labor market conditions or the culture of active aging depends on older adults’ social location.

The effect of insecurity and corruption on opportunity-driven entrepreneurship in Mexico: an fsQCA analysis

PropósitoEl emprendimiento por oportunidad es clave en el desarrollo económico de los territorios. De esta forma, la emigración de individuos potencialmente emprendedores por oportunidad constituye un freno al desarrollo del país de origen. Así, en esta investigación se estudia cómo el efecto combinado de la inseguridad subjetiva, la percepción de corrupción, la norma subjetiva hacia la emigración, el nivel socioeconómico y la intención emprendedora que presentan los estudiantes universitarios potencialmente emprendedores por oportunidad puede afectar a su propensión a emigrar.Diseño/metodología/enfoqueSe emplea una muestra de alumnos (N = 354) de la Universidad Tecnológica del Estado de Zacatecas (UTZAC) y se plantea un modelo causal siguiendo la metodología configuracional fsQCA.HallazgosLos resultados sugieren que los futuros egresados presentan mayor propensión a emigrar cuando su percepción de corrupción y/o inseguridad son altas. De la misma manera, la norma subjetiva es determinante a la hora de tomar la decisión de emigrar. Finalmente, en el caso concreto de los individuos con mayor intención emprendedora también se aprecia una gran influencia de su percepción de corrupción y de inseguridad.Originalidad/valorEste estudio aborda desde un punto de vista cognitivo el efecto sobre el emprendimiento por oportunidad de fenómenos muy presentes en México como son la inseguridad ciudadana, la corrupción, la tradición migratoria y la pobreza.

Rising Inequality and Entrepreneurship during Economic Downturn: An Analysis of Opportunity and Necessity Entrepreneurship in Spain

There is a consensus among researchers that one of the most important effects of the recent economic downturn that started in 2009—also known as the Great Recession—in Spain has been rising income inequality. In this context, researchers are concerned about the effects of inequality on the economy, and this concern is even more marked now, when the world is facing a new crisis that seems the equal of, or even more devastating than the last Great Recession as a consequence of Covid-19. Nevertheless, there is a lack of studies which consider the effects of inequality on entrepreneurship. This paper aims to contribute to a deeper understanding of the relationship between inequality and entrepreneurship in the context of an economic downturn. We focus on the 17 autonomous communities in Spain during the Great Recession (2007–2013). Using unbalanced panel data, we study the effect on entrepreneurial activity, differentiating between total, necessity- and opportunity-driven entrepreneurship. The contribution of this paper is twofold. First, our results offer new empirical evidence concerning the relationship between growing inequality and entrepreneurial activity, showing significant differences from results in the existing literature. Second, we explain how, in a recessionary context of highly restricted financial resources, inequality can negatively affect total, necessity- and opportunity-based entrepreneurship, preventing a large part of the population from engaging in this activity.