Entrepreneurial growth aspirations in challenging environment: The role of institutional quality, human and social capital

Abstract

The role of formal and informal institutions is crucial in forming growth aspirations. Firms use their resources and personal network, trusting to overcome or compensate for inadequate informal institutions. Transition countries can unlock their growth potential by targeting entrepreneurs with high growth aspiration through policy measures (increasing their level of human capital through a higher quality of educational system, aligning formal and informal institutions, promoting well‐functioning and impartial courts). Entrepreneurs use the informal institutions to complement deficient or inadequate formal institutions. Firm size as an indicator of better access to resources moderates positively the effects of informal institution barriers by having a positive influence on growth aspiration. Training, networking, and trust have a positive effect on growth aspiration and entrepreneurs use these practices in response to institutional deficiencies (inadequate educational systems, inefficient courts and other formal institutions). Policy initiatives should consider small firms as being affected by formal institutions.

Coming out of conflict: How migrant entrepreneurs utilise human and social capital

“…Social capital is a product of aggregated resources held within durable networks (Ram et al 2017). While migrant networks vary in terms of the number of actors they incorporate, their location, the benefits they provide to individual members and the strength of relations between network actors can all influence economic activity (Smallbone et al 2010;Lajqi and Krasniqi 2017). Indeed, networks offer migrant entrepreneurs invaluable and unique competitive advantages, making them fundamental to the growth and success of their own businesses, and a potential resource for harnessing entrepreneurship (Nielsen and Riddle 2010).…”

Explaining individual- and country-level variations in unregistered employment using a multi-level model: evidence from 35 Eurasian countries

“…If correct, then it suggests that reducing the commonality of this practice will require not simply the stronger enforcement of formal rules (e.g., by using effective workplace inspections), but also a new emphasis on the reduction of this institutional asymmetry, which will require changes in both informal and formal institutions. To determine the changes in formal institutions required, three theories are evaluated which have sought to explain the various country-level formal structural imperfections and failings that are argued to result in larger informal economies (Krasniqi, 2007;Krasniqi 2011;Williams 2013;Krasniqi and Mustafa 2016;Lajqi and Krasniqi 2017), namely: economic under-development and the lack of modernisation of government (modernisation thesis); too much state interference in social expenditure and redistribution (state overinterference thesis), or inadequate state intervention and protection of workers (state under-intervention thesis). Here, however, these structural conditions are more seen as ways of reducing institutional asymmetry rather than free-standing explanations.…”

Interrelationship between informal training, human capital development and international performance of SMEs: a literature review

“…The scholars observed the considerably low impact of training on the revenue increase in the company. Lajqi & Krasniqi (2017) empirically confirmed that training is the only factor of examined human capital variables, which had a positive impact on an entrepreneur's growth aspirations. These results suggest that training has become more exploited in modern organization with the purpose to increase employees' growth.…”