The Central Role of Entrepreneurs in Transition Economies

Abstract

The authors summarize entrepreneurial patterns in the transition economies, particularly Russia, China, Poland and Vietnam. Markets developed spontaneously in every transition country, but they were built at varying speeds. Some governments impeded the entrepreneurs' self-help by creating conditions that made it hard for informal contracting to work; others created an environment that was conducive to self-help. The spontaneous emergence of markets, furthermore, has its limits. As firms' activities became more complex, they came to need formal institutions. Some governments fostered entrepreneurship by building market-supporting infrastructure; others did not. The authors argue that the success or failure of a transition economy can be traced in large part to the performance of its entrepreneurs.

Formal and informal venture capital investing in emerging economies in Southeast Asia

“…Consequently, investment networking is extremely important for private equity investors to be able to effectively exploit investment opportunities in these emerging Asian economies . This observation further reinforces previous research supporting networking as a mandatory survival strategy in doing business in emerging economies lacking developed institutions (Ahlstrom & Bruton, 2006;McMillan & Woodruff, 2002;Peng & Heath, 1996;Xiao & Ritchie, 2011). Operating in a relative institutional void has forced BAs in these emerging countries to develop informal institutions in order to do deals that have mainly generated quality (above-expectations or meeting-expectations) investments.…”

Institutions, Finance and the Level of Development: the Impact on Entrepreneurship in Transition

“…New firm entry provides a churning effect to the economy, fosters development, innovation and economic change (Hirschman, 1958;Baumol, 1990;McMillan and Woodruff, 2002;Mickiewicz et al, 2005;Berkovitz and Jackson, 2006;Klapper et al, 2006). However, where institutions are weak entrepreneurs either do not undertake new projects or restrict their activities to unproductive ones, with a resulting loss of efficiency (Glaeser et al, 2003;Johnson et al, 1997;Baumol, 1990).…”

Investment Impact of Microfinance Credit in Ghana

“…Like many other countries in Africa, Ghana recognizes the importance that small enterprises place on the economy. Indeed previous literature argues that small enterprises are very important for economic growth (Hartarska et al, 2006;Berkowitz et al, 2002;McMillan et al, 2002).…”