Macro-level determinants of entrepreneurial behavior and motivation

Based on the eclectic theory of entrepreneurship (ETE), this study seeks to understand the general environmental factors that impact opportunity and necessity entrepreneurship. The ETE identifies four key categories of factors that contribute to national entrepreneurship rates: economic opportunities, resources and capacities, governance quality, and culture. To analyse these factors, we performed a PLS-SEM analysis on data from 30 developing countries taken from the period 2005 to 2018. Through such analysis our findings provide insight into how factors are linked to different categories of behaviors that arise from such factors’ categorization. More precisely, our findings reveal that economic opportunities (economic development, ICT use, economic integration, and financial development), resources and abilities (income level, education, and unemployment), and governance quality (business regulations and general governance) are important factors influencing opportunity entrepreneurship and dissuading necessity entrepreneurship. Conversely, cultural factors (uncertainty avoidance and individualism/collectivism) increase necessity entrepreneurship and restrain opportunity entrepreneurship. Particularly, governance quality not only acts as an opportunity catalyst but also an economic opportunity mediator, which is an inhibitor for opportunity and necessity entrepreneurship. Moreover, an indirect impact on opportunity (necessity) entrepreneurship is through the resources and abilities offered due to the economic opportunities. Our study provides implications for management practices and public policy.