The institutional factor on opportunity entrepreneurship in latin america and the caribbean

Abstract

This paper studies the effect of institutions on opportunity entrepreneurship in Latin America and the Caribbean during the period 2005-2016. An entrepreneurial model is proposed, using governance indicators and an index of government efficiency as institutional proxies along with other explanatory variables. Through an unbalanced panel, the results show a positive and significant effect in each institutional variable in relation to the entrepreneurial activity, confirming the importance of the institutional role for opportunity entrepreneurship. In conclusion, the countries that intend to promote this type of entrepreneurial activity should generate and maintain a transparent and diligent institutional environment that allows entrepreneurs to take advantage of business opportunities.