Institutional environment and entrepreneurship: An empirical study across countries

Drawing on institutional theory, we synthesize previous literature that examined the impact of the regulatory, normative, and cognitive dimension of local institutional environment on entrepreneurship. We then test and replicate the link between the institutional environment and two types of entrepr...

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Bibliographic Details
Published inJournal of international entrepreneurship Vol. 12; no. 4; pp. 314 - 330
Main Authors Sambharya, Rakesh, Musteen, Martina
Format Journal Article
LanguageEnglish
Published Boston Springer US 01.12.2014
Springer Nature B.V
Subjects
Business and Management
Culture
Entrepreneurs
Entrepreneurship
Hypotheses
International Economics
Management
Microeconomics
Strategic management
Regulation
Institutional environment
Opportunity-driven entrepreneurship
Necessity-driven entrepreneurship
Market openness
Culture
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Summary:Drawing on institutional theory, we synthesize previous literature that examined the impact of the regulatory, normative, and cognitive dimension of local institutional environment on entrepreneurship. We then test and replicate the link between the institutional environment and two types of entrepreneurial activities—opportunity-driven and necessity-driven entrepreneurship—using recent data on 43 countries. Consistent with prior literature, we find that countries characterized by less market openness, greater power distance, and collectivism tend to have higher levels of necessity-driven entrepreneurship and regulatory quality, and uncertainty avoidance do not seem to have a profound impact on this type of activity. On the other hand, countries with less market openness and regulatory quality, and smaller power distance are associated with opportunity-driven entrepreneurship.
ISSN:1570-7385
1573-7349
DOI:10.1007/s10843-014-0137-1