Seizing the day: increasing entrepreneurial activity in the wake of resource windfalls through FDI, human capital, and democracy

We analyse the influence of exogenous resource windfalls on country-level entrepreneurial activity, emphasizing the importance of subsequent enhancements in net FDI inflows and democratization. Non-OECD nations undergoing resource windfalls show a marginal decline in new business density. Yet, those non-OECD countries elevating net FDI inflows and democratization post-resource windfalls experience heightened new business density. Our results, validated through a variety of sensitivity analyses, emphasize the pivotal role of boosting net FDI inflows and democratization in the post-windfall phase for non-OECD countries aspiring to foster entrepreneurial activity.