Perceptions of Opportunity and Fear of Failure: Does the National Demography Matter?

Focusing on demographic transitions, we develop a theoretical framework grounded in the sense making literature that suggests that people in nations undergoing demographic transitions relate their entrepreneurial behavior to perceptions of enhanced opportunity and fear of failure. Prior studies in the entrepreneurship literature scrutinized these two tendencies separately. Our argument is that they operate in tandem that demographic deficits unleash both perceptions of opportunity and fear of failure. We also maintain that government policies to promote private sector development moderate these relationships. Using a database that covers fourteen years, and 67 countries, we test hypotheses derived from the framework and obtain results that are mostly consistent with it. We discuss the implications of our study for the potential entrepreneurs and policymakers in the conclusion.