Entrepreneurship by necessity and opportunity in the mexican states during the covid-19 crisis

The sanitary measures implemented during the COVID-19 pandemic had a significant effect on the labor market, particularly in terms of entrepreneurship. To analyze this effect, a random-effects data panel was used, including observations for the 32 states of the Mexican Republic, covering the period from the second quarter of 2016 to the third quarter of 2021. As the effect is necessarily differentiated, the variable to be explained is the change in the number of employers and self-employed because the first group could be argued to approximate entrepreneurship by opportunity, and the second, entrepreneurship by necessity. Both groups are explained by variables of the state such as economic activity, access to financial products and whether COVID had any effect on the change in the types of entrepreneurship. The main conclusion is that the crisis generated by the pandemic had a positive effect on entrepreneurship out of necessity (NEC) but was not significant when it came to those called by opportunity (OPP). Public and private interventions are proposed to take advantage of and strengthen this new wave of entrepreneurship.