Political entrepreneurship: entrepreneurship ecosystem perspective

Abstract

We use the entrepreneurial ecosystem perspective to study political entrepreneurship as a form of alignment between disruptive and unproductive entrepreneurs with authorities aiming to get privileged access to resources. Political entrepreneurship (PE) has emerged as a phenomenon in transition and developing economies and may compromise the entrepreneurial ecosystem (EE) objectives. Combining interview and survey data, this study provides an in-depth assessment of entrepreneurial ecosystems in a transition economy and the role that political entrepreneurs play in moderating the effect of resources on the quality of entrepreneurship. Our findings are generalizable to other transition and developing economies as we demonstrate what various configurations of factors increase stakeholders’ perception about EE and directly affect its quality. Our findings reveal that stakeholders appreciate the evolution trends towards mature and productive entrepreneurship, but the progress is slow, nonlinear, with setbacks, still seriously threatened by corruption, lack of competence, and the interference of the political factor as well as regional differences. This study offers implications on how to adopt a place-based and holistic approach to institutional reforms when policymakers aim at creating productive entrepreneurial ecosystems. This study implications are in the adoption of a place-based and holistic approach to institutional reforms when policymakers aim at creating productive entrepreneurial ecosystems. While political entrepreneurship may significantly distort an ecosystem, this study offers recommendations to managers and policymakers who plan to start a business in an environment with weak institutions and the rule of law.

Towards the regional aspects of institutional trust and entrepreneurial ecosystems

“…We argue that informal networks and corruption are a part of the business culture in transition economies. Regulations in these cases are either not enforced or could be challenged informally by economic agents (Baranov et al, 2015;Belitski et al, 2021). Prior research suggested that growth-oriented entrepreneurs should follow existing formal institutions to obtain resources and legitimacy (Su, Zhai, and Karlsson, 2017), while it may be challenging in the highly informal institutional environment of transition economies (Aidis et al, 2008;.…”

“…Based on John Stuart Mill's joint method of agreement and difference (Copi and Cohen, 2001), six cities in Ukraine, Kazakhstan, and Georgia were selected. This method implies that the cases for study should be similar in many aspects, so we chose countries with similar culture, language, and corruption levels, as well as a shared history as part of the Soviet Union (Belitski et al, 2021). However, at the same time, the cases must also demonstrate the difference in some aspects.…”

“…In addition, entrepreneurial activities in transition economies are driven by informal institutions (e.g., local culture, norms, etc. ), enabling entrepreneurs to avoid regulations for the benefit of their businesses by using connections to politicians (Belitski et al, 2021). The situation is similar in other transition economies, such as Belarus and Kazakhstan, where policymakers have formally declared support for small businesses (World Bank, 2019).…”

“…We proxy institutional trust by an inverse of political entrepreneurship in a region (city) (Ivy, 2013;McCaffrey and Salerno, 2011). Political entrepreneurship represents the unethical behaviour of authorities related to lobbying and promoting institutionalized corruption and politically related enterprises (Belitski et al, 2021), and it undermines institutional trust (Mickiewicz et al, 2019;Mickiewicz and Rebmann, 2020).…”

“…An extensive body of research has investigated the link between entrepreneurial ecosystem (EE) and trust (Anderson and Jack, 2002;Thornton, Ribeiro-Soriano, and Urbano, 2011;Kwon and Sohn, 2021;Welter, 2012Welter, , 2021Belitski, Grigore, and Bratu, 2021;Muldoon, Bauman, and Lucy, 2018;Audretsch and Belitski, 2017) to promote productive and innovationoriented entrepreneurship and valuable outcomes for the society (Urbano et al, 2020; Prior studies also pointed out that context matters for entrepreneurial activity (Turro, Alvarez, and Urbano, 2016;Urbano et al, 2019b;Foss, Klein, and Bjørnskov, 2019;Jones et al, 2019;Webb et al, 2014;Welter and Smallbone, 2011), in particular Malecki (2018), Szerb et al (2019), Spigel (2017), Webb et al (2014) extensively examined the context of developed economies. This stream of research could be extended in terms of further understanding of the context for productive entrepreneurship in transition economies, despite all the progress made in the recent entrepreneurship literature (Guerrero and Urbano, 2020;Kansheba and Wald, 2020;Cao and Shi, 2021;De Brito and Leitão, 2021;Welter and Smallbone, 2011;Efendic et al, 2015).…”