Individual entrepreneurial orientation from an economic lens: The U-shaped relationship with economic development and income inequality

• Individual entrepreneurial orientation follows a U-shaped relationship with economic development. • Income inequality produces a “sanding effect” that flattens this U-shaped pattern. • The flattening effect of inequality is significant for proactiveness and risk-taking but not for innovativeness. • Effects are strongest when inequality affects lower-middle income segments. While the economic development-entrepreneurship nexus has been widely studied, the individual entrepreneurial orientation (Ind.EO) phenomenon has not considered development stages across countries, where important differences ranging from poverty to wealth exist. This study investigates the relationship between the level of economic development and individual entrepreneurial orientation, analyzing the moderating role of income inequality. We conducted robust multilevel regression analysis on a sample of 30,292 nascent entrepreneurs from 29 economies drawn from the 2020–2021 Global University Entrepreneurship Spirit Students’ Survey (GUESSS). The findings demonstrate a U-shaped relationship between economic development and Ind.EO, where dispositional-behavioral characteristics are more pronounced in economies situated at both extremes of the development spectrum. Income inequality negatively moderates this curvilinear relationship, producing a flattening effect that reduces entrepreneurial intensity in both low- and high-development contexts. This study offers some of the first empirical evidence on Ind.EO from a cross-national economic perspective and provides valuable guidance for policymakers seeking to promote entrepreneurship through strategies tailored to development stages and mechanisms that mitigate the adverse effects of inequality.