How different formal institutions affect opportunity and necessity entrepreneurship

Abstract

The objective of this research is to deepen in the role played by formal institutions on the different types of entrepreneurship (opportunity and necessity) as well as in its relative importance. The institutions we analyze are property rights, business freedom, fiscal freedom, labor freedom, financial capital and educational capital. Our results show that, in general, opportunity entrepreneurship benefits from an improvement of these institutions, while necessity entrepreneurship is damaged. This will positively influence the relative presence of opportunity entrepreneurship that is usually considered to be of greater quality and is more clearly related to economic development in a country.

Desperate entrepreneurs: no opportunities, no skills

“…Notwithstanding the fact that the research on determinants of entrepreneurial intentions and involvement in entrepreneurship has been extensive (Bosma 2013;Arin et al 2014;Fayolle and Liñán, 2014;Thurik 2015), and incorporates both opportunity and necessity entrepreneurship (e.g. Hechavarria and Reynolds, 2009;Block and Wagner 2010;Deli 2011;Verheul et al 2010;Fuentelsaz et al, 2015), none of these studies have so far applied a similar perspective to ours. Therefore, we hope that this analysis will inspire future research on nons-entrepreneurs in order to fully uncover the determinants behind this phenomenon.…”

Individual, Organizational, and Institutional Determinants of Formal and Informal Inter‐Firm Cooperation in SMEs

“…Studies suggest that factors such as the level of taxes (Bartlett and Bukvič 2001;Bohata and Mladek 1999;Hashi 2001) and the regulatory environment (Brunetti, Kisunko, and Weder 1998;Hashi 2001) directly influence firms' outcomes. Environmental barriers such as a lack of financing (Bartlett and Bukvič 2001;Fuentelsaz et al 2015;Hashi 2001;Pissarides, Singer, and Svejnar 2000) and of trained professionals (Aidis 2005) also affect firms. Cooperation may help SMEs to overcome some institutional barriers.…”

Exploring Risk Perception and Degree of Internationalization of Brazilian Small-and-Medium Enterprises

“…We recognize this limitation, especially considering that Brazilian firms are culturally attached to the domestic market, still being in the process of catching up to a global mindset (Carneiro & Brenes, 2014;Dib et al, 2016), and that the recent decline of the internal economy may be forcing SMEs to assume higher levels of risk and to invest in international market operations. Furthermore, our findings may spark a call for the discussion on internationalization driven by opportunity versus internationalization driven by necessity on IB research (Fuentelsaz, González, Maícas, & Montero, 2015). It is widely known that emerging market entrepreneurs are more likely to be driven by necessity than by opportunity (Sautet, 2013).…”