Finding Entrepreneurial Opportunities in Times of Crisis: Evidence from Tunisia

Abstract

Entrepreneurship is a highly complex process influenced by numerous factors. The goal of this paper is to identify the combinations of fundamental entrepreneurial determinants that drive opportunity recognition (OR) in different economic environments. We focus on two points in Tunisia’s recent economic cycle: before and after the 2011 Revolution. Using micro-level survey data, the study employs ordered logit analysis to identify basic entrepreneur characteristics that may increase the likelihood of identifying entrepreneurial opportunities during these two economic cycle phases. Several key factors, such as training, creativity, and social networks, are found to be ineffective in the OR process. Furthermore, education attainment lost its major and well-established function throughout Tunisia’s profound and protracted socioeconomic crisis. Only self-efficacy and prior experience have particularly strong effects on identifying entrepreneurial opportunities during the period of economic downturn. Despite the government's efforts to incorporate entrepreneurship education into university curricula and business practices, these findings show that Tunisia is still in the early phases of entrepreneurship integration and development, with patchy and uncoordinated activity. The drivers of entrepreneurial perception in the quest for opportunities described by western theories should not be applied uniformly in less developed economies, which have unique political and economic contexts and challenges. We also noticed that the revolution’s resulting crisis did not deter young entrepreneurs from launching business ventures. This finding may pique the Tunisian government’s interest in devising an effective strategy to support young entrepreneurship, especially in light of the new COVID-19 outbreak’s potential impact on Tunisia’s already vulnerable economy.