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The Nature of Entrepreneurship and its Determinants: Opportunity or Necessity?

Author

Listed:
  • Gonçalo Brás

    (Faculty of Economics, University of Coimbra, Portugal)

  • Elias Soukiazis

    (Faculty of Economics, University of Coimbra and GEMF, Portugal)

Abstract

Within the institutional theory of North (1990, 2005), the objective of this study is to analyse the impact of economic and institutional factors, formal and informal, in the entrepreneurial activity of nations, particularly in Total Entrepreneurial Activity (TEA). In order to evaluate the simultaneous influence of economic and institutional factors on the entrepreneurial activity, a multiple regression approach is used with cross-country data sets. The results show that TEA is negatively related to infrastructural capacity and political stability of a country, and positively related to government spending and freedom of expression and corporate associations (Voice & Accountability) at a country level. It is also tested the relationship between TEA and GDP per capita. Our results confirm a convex relationship between the two variables giving evidence that the entrepreneurial activity is mostly necessity driven rather than motivated by opportunity.

Suggested Citation

  • Gonçalo Brás & Elias Soukiazis, 2014. "The Nature of Entrepreneurship and its Determinants: Opportunity or Necessity?," GEMF Working Papers 2014-22, GEMF, Faculty of Economics, University of Coimbra.
    • Handle: RePEc:gmf:wpaper:2014-22.
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    Entrepreneurship by necessity; Entrepreneurship by opportunity; Cross-country regression models; convexity hypothesis; threshold level.;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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