Industry choice by young entrepreneurs in different country settings: The role of human and financial capital

Abstract

Entrepreneurial entry happens as a consequence of a general choice of an individual to become an entrepreneur. While most entrepreneurial entry studies rarely consider an entry into a particular industry to be an aspect of entrepreneurial decision making process, we address this issue taking into account individual, industrial, and country specific attributes. Using data from the Global University Entrepreneurial Spirit Students' Survey (2013-2014) on young and active entrepreneurs and extending it with objective indicators derived from World Bank, Global Entrepreneurship Monitor, and International Property Rights Index datasets, we investigate how various factors influence entrepreneurial industry choice on an aggregated level of industrial typology: knowledge-intensive and capital-intensive industries. Drawing on the RBV and contingency approach, we link an industry choice with the level of human capital development and an access to financial capital and test for possible country-specific moderation effects. Our findings indicate that both types of capital have a significant impact on industry choice by young nascent entrepreneur. Our results also suggest that specific country environment serves as a moderator in this relationship. Thus, our study contributes to entrepreneurial entry research stream extending the understanding of entrepreneurial entry decision making nuances relate to individual access to resources and both industry- and country-level contingencies.