Moderating relationship of institutions for opportunity entrepreneurship and economic development

Abstract

Purpose The purpose of this paper is to develop a conceptual framework that illustrates how resource-based countries, such as those in the Gulf Cooperation Council, can move their economies towards a more sustainable diversified model, through creating and fostering institutions that are conducive for opportunity entrepreneurship. Design/methodology/approach Several key variables pertaining to formal and informal institutions which impact opportunity entrepreneurship are presented in a conceptual framework based on a comprehensive, non-systematic literature review. Findings Findings from the comprehensive literature review suggest that institutions play a moderating role between opportunity entrepreneurship and economic development. Institutions can stimulate entrepreneur’s behaviour leading to economic growth and subsequently development. Proposals worth pursuing in empirical studies in the future are presented based on the review of the literature. Practical implications This framework offers a model for oil-based countries in resolving structural problems in fostering entrepreneurship when responding to economic challenges. Originality/value The proposed framework in this study takes into consideration a comprehensive set of formal and informal institutional factors, rarely discussed in the existing literature, that link opportunity entrepreneurship and economic growth and development. Insights offered by this study have implications for government policy changes in developing effective institutions.

The moderating effect of corruption on the relationship between formal institutions and entrepreneurial activity

“…The interpretation of the previous results could be explained in three ways. First, the previous results could suggest that entrepreneurs who are associated with higher risk levels tend to obtain financial resources from social networks and family connections; this may be because existing financial institutions are underdeveloped and less likely to support their new ventures (Ho and Wong, 2007;Chowdhury et al, 2015b;Fuentelsaz et al, 2015;Ghura et al, 2017). Second, another interpretation for the findings was suggested by Wennekers et al (2005), who argued that emerging economies have higher rates of necessity entrepreneurship (i.e., informal entrepreneurship), which does not require large amounts of credit.…”

“…Second, another interpretation for the findings was suggested by Wennekers et al (2005), who argued that emerging economies have higher rates of necessity entrepreneurship (i.e., informal entrepreneurship), which does not require large amounts of credit. Lastly, although this latter idea could be right, the results also suggested that entrepreneurs may later depend on alternative sources to fund their growing businesses, such as venture capital funds, angel investors and corporate investors, due to the lack of adequate financial infrastructure (Bowen and De Clercq, 2008;Aidis, 2012;Ghura et al, 2017).…”

The Effect of Business Enabling Policies, Tax Treatment, Corruption and Political Connections on Business Climate

“…This implies that the change of the institutional framework affects the entrepreneurial activity by influencing the business environment [2]- [4]. Therefore, as suggested in the literature [5], [6], certain interconnection of institutions and the business climate is envisaged. However, ways in which changes in institutional environment affect the business climate have not received sufficient attention from scholars [7], [8].…”

Entrepreneurial Innovation Impact on Recycling Municipal Waste. A Panel Data Analysis at the EU Level

“…This is the place where entrepreneurs may intervene in an innovative way [18] and boost the link between entrepreneurship and innovation in order to generate better and more functional recycling solutions. Therefore, conceptual and empirical studies were run in order to better demonstrate how much entrepreneurship determines economic growth [19,20], concludes towards a circular economy [21], boosts innovation or vice-versa [22][23][24], and even show the link between these three concepts: innovation, entrepreneurship, and economic growth [25]. Moreover, empirical studies were run in order to find out innovative solutions for smart partnerships [26] and sustainable development [27].…”