Necessity and Opportunity Entrepreneurship in Canada

The present analysis examines the initiation of necessity and opportunity entrepreneurship ventures in Canada from the late 1980s until more recent times, to determine how these activities relate with the business cycle. The definitions of necessity and opportunity entrepreneurship mirror those in Fairlie and Fossen (2018). Unlike previous results for other countries, I find that in Canada, both necessity and opportunity entrepreneurship appear to be procyclical, with new ventures increasing as unemployment declines. These results hold after various robustness tests, including gender stratification are applied. The possibility of using these forms of entrepreneurship as leading or lagged indicators of recessions is also considered.

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 summary Institutions 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.

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.

Interactive Effects of Business Environment Assessment and Institutional Programs on Opportunity Entrepreneurship

The study of the institutional characteristics that create favorable environments for opportunity entrepreneurship is critical. We seek to determine how government programs intended to support entrepreneurship impact how potential entrepreneurs view the business environment. We evaluate the effectiveness of institutional programs and the interactions between them and market optimism. We conduct a binomial regression to evaluate the probability of opportunity entrepreneurship, given the perceived quality of the business and regulatory environments. The results indicate that both have a significant influence, while the regulatory dimensions interact with the effects of the perceived quality of the business environment. We find that individuals who have optimism regarding entrepreneurship still seek assurance of a positive regulatory environment before they act. We find that those who consider it to contain promising entrepreneurship opportunities still seek a positive regulatory climate and supportive government programs before acting. Programs that create favorable financial access can encourage entrepreneurs attracted by financial returns. Similarly, favorable government programs that ensure expansion and growth may reinforce this financial optimism. Our study also adds to the literature on institutional economics, providing evidence that effective institutional factors require productive behaviors from individuals.

Does Entrepreneurship Matter for Inclusive Growth? The Role of Social Progress Orientation

Building upon institutional economics, we examine how social progress orientation (SPO) affects inclusive growth through innovative and opportunity entrepreneurship. Hypotheses about civic activism, voluntary spirit, and the inclusion of minorities as proxies of SPO that affect entrepreneurship directly and inclusive growth indirectly have been suggested. Using unbalanced panel data of 132 observations (63 countries) and the three-stage least-squares method (3SLS), we provide empirical evidence that these three measures of SPO significantly affect innovative and opportunity entrepreneurship. Interestingly, our endogenous measures of entrepreneurial activity have served to explain inclusive growth, which is observed through poverty reduction across countries. Public policies should focus on social values oriented to progress in order to stimulate valuable entrepreneurial activity and hence facilitate economic development that also embraces vulnerable communities.

Exploring Women's Entrepreneurship and Poverty: Necessity versus Opportunity Motivations

What is the relationship between entrepreneurship, economic growth, and poverty? Women choose to become entrepreneurs or self-employed for different reasons in developed countries such as the United States and Sweden, with varying effects on poverty and economic growth. This paper explores the motivations behind entering the entrepreneurial space for women, differentiating between opportunity (taking actions to create a new venture following a perceived business opportunity despite other options to earn a living) and necessity (becoming involved in entrepreneurial activities due to a lack of other options to earn a living) motivations. It also highlights entrepreneurship's relationship with poverty and economic growth, while providing recommendations on how to encourage opportunity entrepreneurship and reduce poverty while discouraging necessity entrepreneurship.