The Joint Effect of Institutional Profile and National Innovation System on the types of Entrepreneurship

While prior research has uncovered the impact of some national institutions on the general level of entrepreneurship in a country, there is still limited knowledge about the role of the institutional arrangements of a country on specific types of entrepreneurial activities, namely necessity versus opportunity entrepreneurship. To address this gap, we conduct a multilevel analysis using a sample of 10776 individuals from 55 diverse countries to examine how institutional factors (i.e., countries’ institutional profile and national innovation system) impact entrepreneur’s choice of pursuing a specific type of entrepreneurship. Using Hierarchical Linear Modeling, the findings indicate that neither institutional profile nor national innovation system (NIS) elements solely determine the choice between opportunity motivated entrepreneurship (OME) and necessity motivated entrepreneurship (NME); however, OME tends to be higher in instances when supportive institutional arrangements (regulatory, normative, and cognitive) toward entrepreneurship get coupled with national innovation system factors. The study contributes to a more nuanced understanding of embedded agency within the institutional logics perspective. It bridges the literature on individual and institutional antecedents of entrepreneurship. Further implications for theory and practice are discussed.