EGADE Business School, Tecnologico de Monterrey, Mexico
Through human capital theory and the external enablers (EE) framework, this study investigates the dynamics of innovative entrepreneurial activity (IEA) among nascent entrepreneurs in Latin America and the Caribbean (LAC) and how the mechanisms of an external environmental shock, such as the COVID-19 pandemic, reshaped these dynamics. We test our hypotheses using data from the Global Entrepreneurship Monitor (GEM) of four representative LAC countries covering the period from 2019 to 2021. We empirically found that the COVID-19 pandemic acted as an EE for the enhancement of outcomes toward more innovative entrepreneurial activity. Additionally, the pandemic reduced the educational gap, maintained the entrepreneurial experience gap at the same level, and increased the opportunity confidence gap among new entrepreneurs and innovators in LAC countries. We discuss the theoretical contributions that focus on the relationships between EEs and innovative entrepreneurial activity in LAC countries and their practical implications, centering on how entrepreneurs, along with public and private actors, can meet the challenges of the new normal caused by the COVID-19 pandemic.
