An attention-based perspective on how climate impact affects opportunity entrepreneurship

Abstract Climate impact, which refers to the losses resulting from climate change-related events, is one of the most pressing challenges for societies worldwide. Contributing to the climate impact–entrepreneurship nexus, we assess how climate impact affects individual engagement in opportunity entrepreneurship. Drawing on the attention-based view (ABV) and on socio-cognitive theory (SCT), we hypothesize that climate impact increases opportunity entrepreneurship, and that this effect is moderated by individuals’ socio-cognitive characteristics. Combining data from the Global Entrepreneurship Monitor (GEM) and the Climate Risk Index (CRI), we conduct a multilevel analysis that involves 964,440 individuals from 94 countries from 2010 to 2018. In support of our hypotheses, our results suggest that climate impact is positively related to engagement in opportunity entrepreneurship. We also find that this association is negatively moderated by entrepreneurial self-efficacy and entrepreneurial alertness, and positively by entrepreneurial fear of failure. We conclude by discussing the implications of our attention-based understanding of climate impact as a catalyst for opportunity entrepreneurship.

Plain English Summary Climate impact is one of the most pressing societal challenges. Climate impact refers to human and economic losses resulting from climate change-related extreme weather events, such as storms (e.g., typhoons, hurricanes), floods, draughts, and wildfires. Because of its considerable societal and economic consequences, climate impact also affects entrepreneurs and enterprises globally. Our study shows that higher climate impact leads to more individuals starting businesses to take advantage of new opportunities (i.e., opportunity entrepreneurship). We also reveal that several individual characteristics shape this relationship between climate impact and engagement in opportunity entrepreneurship: individuals who have a stronger belief in their capabilities (i.e., high entrepreneurial self-efficacy) and who are more entrepreneurially vigilant and have a higher capacity to detect new opportunities (i.e., high entrepreneurial alertness) pay less attention to starting opportunity-based businesses when their country faces greater climate impact. In contrast, individuals who are generally more afraid of failing with their business (i.e., high entrepreneurial fear of failure) now feel more encouraged to engage in new opportunities for enterprises. By uncovering the complex interplay between climate impact and opportunity entrepreneurship, our results provide policymakers and other societal stakeholders with an evidence-based foundation to establish support mechanisms that help foster opportunity entrepreneurship in the aftermath of climate impact. Specifically, our evidence-based approach provides implications on how policy programs can be specifically designed to better serve different individual characteristics.