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Cross‐Country Determinants of Early‐Stage Necessity and Opportunity‐Motivated Entrepreneurship: Accounting for Model Uncertainty

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  • Boris N. Nikolaev
  • Christopher J. Boudreaux
  • Leslie Palich

Abstract

Model uncertainty is one of the most pervasive challenges in the social sciences. Cross‐country studies in entrepreneurship have largely ignored this issue. In this paper, we evaluate the robustness of 44 possible determinants of early‐stage opportunity‐motivated entrepreneurship (OME) and necessity‐motivated entrepreneurship (NME) that are broadly classified in four groups: (1) economic variables, (2) formal institutions, (3) cultural values, and (4) legal origins and geography. The results, which are based on a representative world sample of up to 73 countries, suggest that institutional variables associated with the principles of economic freedom are most robustly correlated with OME and NME. Our findings also identify net income inequality and Scandinavian legal origins as weakly robust predictors of both types of entrepreneurial activity. Furthermore, we find that log GDP per capita is only a weakly robust predictor of NME, but not OME. We discuss implications for future research.

Suggested Citation

  • Boris N. Nikolaev & Christopher J. Boudreaux & Leslie Palich, 2018. "Cross‐Country Determinants of Early‐Stage Necessity and Opportunity‐Motivated Entrepreneurship: Accounting for Model Uncertainty," Journal of Small Business Management, Taylor & Francis Journals, vol. 56(S1), pages 243-280, March.
    • Handle: RePEc:taf:ujbmxx:v:56:y:2018:i:s1:p:243-280
    DOI: 10.1111/jsbm.12400
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    Cited by:

    1. Christopher J. Boudreaux & Daniel L. Bennett & David S. Lucas & Boris N. Nikolaev, 2023. "Taking mental models seriously: institutions, entrepreneurship, and the mediating role of socio-cognitive traits," Small Business Economics, Springer, vol. 61(2), pages 465-493, August.
    2. Małgorzata Wosiek, 2023. "Unemployment and Enterprise Births in European Countries: A Sectoral Approach," Sustainability, MDPI, vol. 15(2), pages 1-17, January.
    3. Zimei Liu & Yezhi Ren & Yanlan Mei, 2022. "How Does Internet Use Promote Farmer Entrepreneurship: Evidence from Rural China," Sustainability, MDPI, vol. 14(24), pages 1-15, December.
    4. Saunoris, James W., 2024. "Individualism, economic freedom, and the development of the shadow economy," Economic Systems, Elsevier, vol. 48(1).
    5. Guerrero, Maribel & Siegel, Donald S., 2024. "Schumpeter meets Teece: Proposed metrics for assessing entrepreneurial innovation and dynamic capabilities in entrepreneurial ecosystems in an emerging economy," Research Policy, Elsevier, vol. 53(5).

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