Institutions and Entrepreneurship Quality

Abstract

Institutions and Entrepreneurship Quality Entrepreneurship contributes importantly to the economy. However, differences in the quality and quantity of entrepreneurship vary significantly across developing and developed countries. We use a sample of 70 countries over the period of 2005-2015 to examine how formal and informal institutional dimensions (availability of debt and venture capital, regulatory business environment, entrepreneurial cognition and human capital, corruption, government size, government support) affect the quality and quantity of entrepreneurship between developed and developing countries. Our results demonstrate that institutions are important for both the quality and quantity of entrepreneurship. However, not all institutions play a similar role; rather, there is a dynamic relationship between institutions and economic development.

Does income inequality sand or grease the wheels of entrepreneurial activity? International evidence

“…The effects of regulation, in terms of bureaucratic quality, are also sensitive to the prevalence of entrepreneurship, oscillating between sanding (at low prevalence of entrepreneurship) and greasing (at high prevalence of entrepreneurship). Placing this novel insight in the context of the extant literature, while different institutions have been shown to have different impacts on entrepreneurship (Chowdhury et al, 2019), we show that the same institution (bureaucratic quality) can have varying effects.…”

“…In recognition of the importance of government institutions in shaping entrepreneurship (Chowdhury et al, 2019), Table 6 reports results after accounting for the impact of bureaucratic quality (BureauQual) across the prevalence of entrepreneurship. It could be the case that improvements in bureaucratic quality affect entrepreneurship in a nation depending upon the prevalence of entrepreneurial activity.…”

“…Improvements in specific institutions (Stephen, Urbano, & van Hemmen, 2005), related to economic freedom (Cebula et al, 2015), democracy, government stability and bureaucratic quality would all be expected to encourage entrepreneurship. The importance of institutions in affecting both the quantity and the quality of entrepreneurship has been recognised in the literature (see, e.g., Chowdhury, Audretsch, & Belitski, 2019). Countries with higher economic freedom (EconFREE), for example, have stronger private property rights and less burdensome taxes and regulations and encourage risk‐taking and entrepreneurship (Bjørnskov & Foss, 2008).…”

Linking firm characteristics to perceived important social factors for entrepreneurial activity

“…In this way, the above actors can adjust existing policies aiming at entrepreneurship. Accordingly, it is important to investigate psychological, situational and contextual factors that shape entrepreneurial activity (Ayyagari et al, 2007;Çera, et al, 2019b;Chowdhury et al, 2019).…”

“…This lead to the fact that business activity is affected by institutions (Draskovic et al, 2017). Changes in institutions affect the environment where enterprises take and implemented their decisions (Chowdhury et al, 2019;Bilan et al, 2017a).…”