Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence

Sebastian Aparicio, David Urbano, David Audretsch

Research output: Contribution to journalArticleResearchpeer-review

174 Citations (Scopus)

Abstract

© 2015 Elsevier Inc. This paper explores the institutional factors that encourage opportunity entrepreneurship in order to achieve higher rates of economic growth. We suggest that institutions may not have an automatic effect, as is typically assumed in growth models. Rather, a mechanism is required to serve as a conduit into the society for those institutional factors that affect productive behavior such as entrepreneurial activity. Thus, opportunity entrepreneurship is identified as one such mechanism that impacts on economic growth. Using a three-stage least-square method through unbalanced panel data with 43 countries (2004-2012), we find that informal institutions have a higher impact on opportunity entrepreneurship than formal institutions. Variables such as control of corruption, confidence in one's skills and private coverage to obtain credit promote a positive effect of opportunity entrepreneurship on economic growth in all the countries of our sample, and especially in Latin American countries as a homogeneous group. These results suggest additional elements to the theoretical discussion in terms of the importance of institutions as framework to understand determinants and effects of opportunity entrepreneurship. Regarding policy implications, the results also suggest that it could be possible to obtain economic growth encouraging the appropriate institutions in order to increase the entrepreneurship by opportunity.
Original languageEnglish
Pages (from-to)45-61
JournalTechnological Forecasting and Social Change
Volume102
DOIs
Publication statusPublished - 1 Jan 2016

Keywords

  • Economic growth
  • Institutional economics
  • Latin American countries
  • Opportunity entrepreneurship
  • Panel data analysis

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