New Venture Creation and Infrastructure in Developed and Developing World Countries

Knowledge of contexts under which infrastructure affects entrepreneurship is often used as important policy tool to inform and improve infrastructural investments, and to boost entrepreneurial activities in developed and developing world countries (DDWC). Research has shown that scholars do not give infrastructure due importance in entrepreneurship studies. This thesis aims to critically evaluate nature and type of the relationships between infrastructure and new venture creation in DDWC in order to achieve the following objectives: i) Further understanding, and develop extant knowledge about infrastructure; its definition, its classification and its importance. ii) Highlight different infrastructure categories as a possible explanation to regional variations in the levels of entrepreneurial activities across DDWC. iii) Demonstrate how to construct an index of the economic infrastructure category and apply it to rank some countries. iv) Evaluate direct and/or indirect effect(s) of dimensions of the economic infrastructure category (aggregated and disaggregated) on some country-level entrepreneurial activities (e.g. entrepreneurial transition, necessity entrepreneurship etc.) in DDWC. First, a systematic literature review (SLR) was undertaken and its findings used to define, then classify infrastructure into four categories, and nature/type of its reported relationships with new venture creation explored. Effects were largely positive and direct for economic and institutional categories, mixed for the social category, and unknown for the technological category. Next, economic infrastructure (EI) index constructed from several secondary data sources (World Bank, IMF, GEM etc.) was used to rank 112 developing world countries. Subsequently, index effect was evaluated on nascent entrepreneurial transition on sample of 42 sub-countries. Ordinary Least Squares (OLS) and Two Stage Least Squares (2SLS) regression techniques were applied, and index was shown to affect said transition only indirectly, through corruption perceptions. Index effect (disaggregate) was also evaluated on motivation-driven entrepreneurship. OLS and hierarchical multiple regression (HMR) techniques were applied on sample of 31 developed world countries. Findings suggested index attributes that enhanced opportunity-motivated entrepreneurship (OME) rather hurt necessity-motivated entrepreneurship (NME), and vice versa. Furthermore, state fragility was shown to mediate associations between some index attributes and OME, as well as NME. Keywords: infrastructure, new venture creation, developed and developing world, entrepreneurial transition, corruption perception, opportunity-motivated and necessity-motivated entrepreneurship, state fragility.