Economic policy uncertainty and new venture initiation: The role of opportunity belief and uncertainty avoidance.

This article investigates how economic policy uncertainty (EPU)—defined as unpredictability in government economic decisions—affects individuals’ decisions to initiate new ventures, focusing on the mediating role of opportunity belief (the perception of viable business opportunities) and the moderating influence of national culture, specifically uncertainty avoidance. Using a multilevel analysis of data from 677,715 individuals across 22 countries (2010–2018), the study finds that higher EPU reduces new venture initiation partly by weakening opportunity belief, with this negative effect being stronger in societies characterized by high uncertainty avoidance, where unpredictability is perceived as more threatening. The research integrates institutional theory’s regulative, cognitive, and normative pillars to explain how institutional volatility and cultural context jointly shape entrepreneurial behavior. The findings suggest that transparent and stable economic policies, along with proactive information dissemination, are crucial for fostering entrepreneurship, especially in cultures less tolerant of uncertainty.