Unicorn Companies —How Does the Country's Environment Drive Its Emergence?

Abstract

Driven by innovative solutions and business models, the Unicorn companies have developed widely. Nevertheless, the existing research is fragmented and limited mainly by descriptive approaches to examing the rise of these companies. We examine the association between the country-specific factors and the emergence of Unicorn companies in certain countries. Cross-sectional linear and logistic regression models are used on the dataset of 100 countries, 51 of which have a minimum of 1 Unicorn, and the rest have not anyone. The results allow us to conclude that the probability of Unicorn emergence depends on the entrepreneurial culture, human capital, and regulatory environment of the country. In other words, entrepreneurial spirit, education, and a favorable legal environment can lead to the appearance of a Unicorn in the country. The further development and appearance of more Unicorn companies are ensured by the availability of financing and the development of IT-infrastructure. Key characteristics include the growth of venture financing and the openness of firms to new technologies in the country. The study contributes to the existing research in part of focusing on the quantitative analysis of the association between the country-specific factors and the Unicorns' activity.