How does institutional quality influence opportunity entrepreneurship? A panel data analysis of OECD countries

Institutional theory contends that high-quality institutions promote opportunity entrepreneurship. More recently, institutional anomie theory has underpinned more fine-grained investigations of some social institutions and their role in fostering opportunity entrepreneurship. Building on these theoretical frameworks, this study analyzes whether, how and which formal and social institutions matter for opportunity entrepreneurship. We test our hypotheses on 36 OECD countries over the period 2000-2014, adopting panel data techniques. The main findings suggest that not all institutions are able to increase opportunity entrepreneurship, while some high-quality institutions should be further promoted because of their positive impact on opportunity entrepreneurship. This is the case of regulatory quality (e.g., macroeconomic regulations; property rights and corruption control; socioeconomic conditions; and religion) that need to be tempered by secular values and rules to avoid the risk of a single religious group influencing society and/or governance and undermining opportunity entrepreneurship.