Regional governments and opportunity entrepreneurship in underdeveloped institutional environments: An entrepreneurial ecosystem perspective

• This study fills the gap of the role of regional governments in local entrepreneurial ecosystems in underdeveloped institutional environments. • In these environments, the delivery of public and social services by regional governments yields the growth of local opportunity entrepreneurship. • Other key elements in local entrepreneurial ecosystems—a market-based economy, higher education institutions, an entrepreneurial culture, and social entrepreneurship—make the role of regional governments more effectively. • A longitudinal analysis of China at regional level provides strong evidence and policy implications. The role of regional governments in fostering opportunity entrepreneurship has received increasing attention from both academics and practitioners. Drawing on research on entrepreneurial ecosystem (EE), this study provides a more analytical and holistic account of the supportive role of regional governments in underdeveloped institutional environments and their interactions with other key elements in regional EEs. I propose that in underdeveloped institutional environments, a regional government which is able to perform its core function of delivering public and social services is positively associated with the growth of opportunity entrepreneurship. This effect becomes stronger in regions with more market-based economies, higher education institutions (HEIs), an entrepreneurial culture, and social entrepreneurship. Empirical results based on entrepreneurship data at the provincial level in China between 1993 and 2013 provide strong support for the hypotheses. This study contributes to the literature on EE by providing more systematic evidence from underdeveloped institutional environments, and has policy implications for promoting opportunity entrepreneurship.