Institutional Factors, Opportunity Entrepreneurship and Economic Growth: Panel Data Evidence

Technological Forecasting and Social Change, 102, 45-61

Posted: 18 Jul 2015 Last revised: 10 Mar 2017

See all articles by Sebastian Aparicio

Sebastian Aparicio

Durham University Business School; Autonomous University of Barcelona; Fundación ECSIM Centro de Estudios en Economía Sistémica

David Urbano

Autonomous University of Barcelona

David B. Audretsch

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Date Written: January 1, 2016

Abstract

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.

Keywords: Institutional economics, opportunity entrepreneurship, economic growth, panel data analysis, Latin American countries

Suggested Citation

Aparicio, Sebastian and Urbano, David and Audretsch, David B., Institutional Factors, Opportunity Entrepreneurship and Economic Growth: Panel Data Evidence (January 1, 2016). Technological Forecasting and Social Change, 102, 45-61, Available at SSRN: https://ssrn.com/abstract=2631535

Sebastian Aparicio (Contact Author)

Durham University Business School ( email )

Mill Hill Lane
Durham, DH1 3LB
United Kingdom

HOME PAGE: http://https://www.dur.ac.uk/business/

Autonomous University of Barcelona ( email )

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
Spain

Fundación ECSIM Centro de Estudios en Economía Sistémica ( email )

Cr. 43 A # 6 sur – 26, of. 423-424-425
Medellín, Antioquia
Colombia

HOME PAGE: http://www.ecsim.org

David Urbano

Autonomous University of Barcelona ( email )

Edifici B, Campus UAB
Bellaterra, Barcelona 08193
Spain
34935811209 (Phone)

HOME PAGE: http://www.davidurbano.eu

David B. Audretsch

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

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