From Discovery to Exploitation: Evidence on Entrepreneurial Action Among Latin American University Students

Technical Summary: From Discovery to Exploitation: Evidence on Entrepreneurial Action Among Latin American University Students

Problem Statement
Entrepreneurial action is a critical driver for economic development in Latin America, yet a significant gap exists between the generation of business ideas and their materialization into new ventures. While literature extensively covers the "discovery" (identifying opportunities) and "exploitation" (implementing ventures) phases, there is a lack of empirical consensus on how personal attributes (entrepreneurial profile) and environmental perceptions interact to drive the transition between these stages. Specifically, it remains unclear whether the entrepreneurial profile influences exploitation directly or indirectly through discovery, and how environmental perception functions within this sequential process. Furthermore, the debate between "discovery theory" (opportunities exist objectively) and "creation theory" (opportunities are constructed) requires further empirical validation within educational contexts.

Methodology
The study employs a quantitative, cross-sectional, non-experimental design to analyze data from 477 undergraduate students enrolled in ACBSP-accredited business schools across four Latin American countries: Mexico, Peru, Ecuador, and Paraguay. Participants were required to be at least 18 years old and have completed at least one entrepreneurship-related course.

• Measures: The study utilizes a 5-point Likert scale to measure latent variables.
  • Individual Profile: Composed of Financial Literacy (7 items, $\alpha$=.94), Entrepreneurial Self-Efficacy (5 items, $\alpha$=.95), and Entrepreneurial Attitude (8 items, $\alpha$=.92).
  • Environment Perception: Assessed via 16 items covering market conditions, financing access, government policies, support services, and societal perception ($\alpha$ ranges from .51 to .92 across subscales).
  • Entrepreneurial Action: Measured using a 16-item scale (Botha & Pieterson, 2022) divided into Discovery (exploration, validation; $\alpha$=.89) and Exploitation (implementation, investment; $\alpha$=.96).
• Analysis: Structural Equation Modeling (SEM) with robust maximum likelihood estimation was used to test the hypothesized path model. The model controlled for age and sex. To address the inherent temporal bias of cross-sectional mediation, the authors conducted a sensitivity analysis following Georgeson et al. (2025). This involved generating 208 longitudinal scenarios using phantom variables to reconstruct alternative data-generating processes, ultimately evaluating 135 admissible models to test the robustness of indirect effects against temporal misspecification.

Key Results
The structural equation model demonstrated an acceptable fit to the data ($\chi^2$= 139.153, CFI = .943, RMSEA = .072). The findings support the following relationships:

1. Entrepreneurial Profile and Action: There is a positive and direct association between the entrepreneurial profile (self-efficacy, attitude, financial knowledge) and both discovery and exploitation actions.
2. Mediation of Discovery: Discovery significantly mediates the relationship between the entrepreneurial profile and exploitation. This supports the sequential logic where personal attributes drive the discovery phase, which in turn facilitates exploitation.
3. Environmental Perception: The perception of the entrepreneurial environment directly influences exploitation. However, contrary to the hypothesis that environment drives exploitation through discovery, the study found that environmental perception does not significantly mediate its relationship with exploitation via the discovery phase.
4. Robustness: The indirect effect of the entrepreneurial profile on exploitation (mediated by discovery) remained robust across 97.8% of the admissible longitudinal sensitivity scenarios, suggesting the finding is stable even under varying assumptions of temporal dynamics.

Key Contributions

• Theoretical Integration: The study contributes to the ongoing debate between discovery and creation theories by providing empirical evidence that supports the relevance of the discovery phase as a necessary precursor to exploitation in university settings. It validates a sequential framework where opportunities are actively constructed through a progression from discovery to exploitation.
• Contextual Evidence: It offers rare empirical data from four distinct Latin American economies, highlighting how personal profiles and environmental perceptions function within this specific regional context.
• Methodological Rigor: By applying the Georgeson et al. (2025) sensitivity analysis, the paper addresses the limitations of cross-sectional mediation, offering a more robust validation of the proposed causal pathways than typical cross-sectional studies.

Significance and Claims
The authors claim that their findings provide actionable guidance for the design of entrepreneurship curricula. Specifically, the study suggests that educational programs should focus on strengthening the entrepreneurial profile (self-efficacy, attitude, and financial knowledge) to foster the discovery phase, which is a critical gateway to exploitation.

Practically, the paper argues for the creation of iterative, experiential learning environments that allow students to progress from idea exploration to venture implementation. The authors assert that while environmental factors (such as university support and policy perception) directly aid exploitation, the primary educational lever for moving students from intention to action lies in developing the individual's capacity to discover and validate opportunities. The study concludes that recognizing discovery as a preliminary, distinct phase is essential for formulating institutional strategies that effectively support student entrepreneurs.