Abstract

This paper explores nascent entrepreneurs’ (NEs’) perceptions of the entrepreneurial climate in Latvia and the United States. Because of Latvia’s relatively recent transition to a market economy, we hypothesize that Latvian NEs perceive environment more negatively than Americans. Further, we hypothesize that women NE’s perceive entrepreneurial climate more positively than men (Carter 1997) and that NEs with previous startup experience perceive entrepreneurial climate more negatively (Reynolds and White 1997). We also hypothesize that climate perceptions differ depending on NEs’ motivation (necessity vs. opportunity). Since actual business opportunity is not present to motivate necessity-entrepreneurs, a positively perceived entrepreneurial climate may be a more important motivator for them than for the opportunity-entrepreneurs. Since there is a link between a positive entrepreneurial climate in terms of labor force growth and taxes (Armington and Acs 2002) and firm formation rates, we hypothesize a positive relationship between NEs’ perception of entrepreneurial climate and their venture growth expectations.

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