Opportunity entrepreneurship, oil rents and control of corruption

Abstract

Purpose

This paper aims to better understand the conditions that can lead to high and low opportunity entrepreneurship in countries with oil rents. Additionally, the study aims to find out the differences between countries with oil rents and countries without oil rents.

Design/methodology/approach

A configurational analysis based on fuzzy-set qualitative comparative analysis was performed for a sample of 46 countries with oil rents and a sample of 20 countries without oil rents, using Country data from the World Bank World Development Indicators, World Bank Worldwide Governance Indicators, KOF Swiss Economic Institute, and Global Entrepreneurship Monitor.

Findings

The results show that control of corruption is important to achieve high levels of opportunity entrepreneurship in countries with oil rents and countries without oil rents alike. It is highlighted that the abundance of oil resources in a given country is not a curse, if some conditions are met. Multiple configurations that lead to high levels of opportunity entrepreneurship in countries with oil rents are presented. The study shows that none of the antecedent conditions is necessary per se, it is the combination of conditions that leads to the outcome of interest. The study indicates that either high control of corruption or low taxes should occur, no matter the combination of conditions, to achieve high levels of opportunity entrepreneurship.

Research limitations/implications

The relation between control of corruption and entrepreneurship is complex and, in spite of the insights that were gathered herein, much is still to be explored. The coverage rate of the solutions shows that there are countries with high levels of opportunity entrepreneurship that do not fit in any of the obtained configurations. The sample size is also a limitation. Furthermore, to compute the set membership thresholds, the anchors were based on the percentiles, given the lack of theoretical basis to do so. Thus, other methods should also be used in the future, if possible with a larger data sample.

Practical implications

The obtained results have implications for policy makers, authorities and potential entrepreneurs. In countries that are oil producers, policy makers aiming to promote opportunity entrepreneurship should take into account that it is the combination of conditions that is important, and not each condition by itself. They should consider that several solutions are possible. Authorities aiming to promote anti-corruption reforms, can leverage the findings of this study to demand for more resources to institute practices and structures to better control corruption, and should articulate among themselves the actions to carry on to improve the level of opportunity entrepreneurship in their country. Potential entrepreneurs can use the findings of this study to ask for anticorruption reforms and tax reforms, and they should use their entrepreneurial talent to try to speed up the change.

Originality/value

By overlapping streams of research in entrepreneurship, institutions and oil curse, this study makes several contributions to the entrepreneurship literature. Different from extant literature, the study uses a configurational approach and identifies the combinations of conditions that lead to high and low opportunity entrepreneurship in countries with oil rents. The non-linearity of the configurations is highlighted. Furthermore, for the first time, the study includes a panel without oil rents in the analysis, which enabled a comparison with the other set of countries and provides new insights about the importance of control of corruption to achieve high levels of opportunity entrepreneurship.

Citation

Torres, P. and Godinho, P. (2019), "Opportunity entrepreneurship, oil rents and control of corruption", Journal of Enterprising Communities: People and Places in the Global Economy, Vol. 13 No. 5, pp. 647-667. https://doi.org/10.1108/JEC-07-2019-0067