Analyzing institutional dimensions and their effect on the survival of necessity and opportunity entrepreneurship

Abstract While academia and policymakers have long favored opportunity entrepreneurship for its link to innovation and economic growth, recent evidence suggests that necessity entrepreneurship can manifest in diverse ways and develop into viable, long-lasting ventures. This is why our research goes beyond the debate about which type of entrepreneurship should be promoted. We analyze the institutional dimensions (regulative, normative and cultural-cognitive) that influence both opportunity and necessity entrepreneurship and their survival. Using data from the Panel Study of Entrepreneurial Dynamics (PSED II), which allows for a longitudinal study, we employ a binary logistic model and survival analysis. The main results show that the governmental support for entrepreneurship (regulative dimension) does not explain opportunity entrepreneurship. However, this dimension has a positive influence on firm survival. Based on our results, tailored policies and resources can be developed for each type of entrepreneurship (opportunity and necessity), taking into account institutional dimensions.