An economic view of entrepreneurial intention

Abstract

Purpose

The role of macrolevel factors in entrepreneurial intention remains as an underexplored issue in the literature. The purpose of this study is to reduce this gap by testing the effect of economic development on entrepreneurial intention.

Design/methodology/approach

This study adopts a quantitative approach that formally tests for a quadratic relationship between economic development measured by the gross domestic product (GDP) and the Global Competitiveness Index (GCI)) and entrepreneurial intention based on longitudinal data covering 72 countries over the 2010–2016 period. Data are gathered from the Global Entrepreneurship Monitor (GEM), the International Monetary Fund (IMF) and the World Economic Forum (WEF).

Findings

The results reveal the existence of a U-shaped relationship between the country's GDP per capita and individuals' entrepreneurial intention. The results also support a similar relationship between GCI and entrepreneurial intention. These findings suggest that individuals' entrepreneurial intentions differ between countries depending on the level of economic development.

Originality/value

To the authors' knowledge, this article presents the first attempt to investigate the role of economic development on entrepreneurial intention based on longitudinal data covering a large sample of countries. Moreover, by providing evidence of a U-shaped relationship between economic progress and individuals' propensity to attempt an entrepreneurial career, this study enhances the understanding of the macrolevel determinants of entrepreneurial intention.

Citation

Nakara, W.A., Laouiti, R., Chavez, R. and Gharbi, S. (2020), "An economic view of entrepreneurial intention", International Journal of Entrepreneurial Behavior & Research, Vol. 26 No. 8, pp. 1807-1826. https://doi.org/10.1108/IJEBR-12-2019-0693