Environmental Factors and Entrepreneurship in Spain : A Regional Comparison

Purpose – The main objective is to analyse the relationship between environmental factors and entrepreneurship in a regional Spanish level. The research is based on the GEM theoretical model and Institutional Economics is used as a theoretical framework.Design/methodology/approach – GEM regional Spanish data is used in the empirical part of the study, using both univariable and multivariable techniques in the statistical analysis.Findings – There exists a significant influence of the environmental factors in the total entrepreneurial early stage activity index (TEA) of the Spanish regions. This influence is summarized by two canonical functions that represent the institutional and the natural entrepreneurial framework conditions, which discriminate the 17 regional TEA in the four established groups with a goodness of fit higher than a 75%. The most influent variables are those that represent the expert evaluation over post secondary educational entrepreneurial orientation, over government policies referred to laws and bureaucracy and over the opportunities existence.Research limitations/implications – The study is focused specifically on institutional factors. There is a need to distinguish in the future research, formal and informal environmental factors, to determine their effects on entrepreneurship.Practical implications – The results of this paper open the door to new developments in the study of the influence of the framework conditions in undernational entrepreneurship level. Also, the methodology of this research could be useful for other countries to advance in the regional entrepreneurship studies with GEM data and to compare their obtained results.Originality/value – The study provides a framework for analysing environmental factors to new firm creation in a regional level