Does entrepreneurial activity matter for economic growth in developing countries? The role of the institutional environment

The discussion on which institutions determine entrepreneurial activity – and the role of institutions in the aggregated output for developing countries – is as yet unresolved. The extant literature about entrepreneurship recognizes new ventures as potential mechanisms for long-term development. Yet, there is a consensus on the lack of evidence, particularly for these countries. Drawing on institutional economics, this article explores the interrelationships among institutional environment, entrepreneurial activity, and economic growth. To this end, we use simultaneous-equation panel data models for a sample of 14 developing countries (78 observations) over the period of 2004–2012. The main findings suggest a causal chain running from institutions to opportunity entrepreneurship, which is linked to the economic growth of emerging economies. In particular, we find that institutional factors – such as the number of procedures to start a new business, private credit coverage ,, and access to communication– influence entrepreneurial activity driven by opportunity. Policy implications for developing countries could be derived in order to enhance their economic performance through entrepreneurial activity.

     

Conceptualizing social entrepreneurship in the context of emerging economies: an integrative review of past research from BRIICS

Social entrepreneurship is well practiced and talked about in emerging economies. However, till date, no dedicated review and conceptual framework exists, synthesizing and integrating past social entrepreneurship research in the fast growing emerging economies, commonly known as BRIICS (Brazil, Russia, India, Indonesia, China, and South Africa). The purpose of this article is to bridge that gap by conducting an integrative review of 123 most relevant peer-reviewed scholarly articles, filtered out of 1779 search results in six different research databases. Country-specific conceptual perspectives have been extracted and integrated to formulate a novel social entrepreneurship framework that is inclusive of five key social entrepreneurship dimensions emerging from these economies: (a) Social Welfare, (b) Social Capital, (c) Social Entrepreneur, (d) Economic Value Creation, and (e) Collective Endurance. This exercise was an initiative to facilitate the global community of social entrepreneurship researchers and practitioners in understanding the diversity, meaning, and evolution of the social entrepreneurship phenomenon in the context of emerging economies. They can advance research in this domain with the aid of the proposed framework and the research questions proposed for future research.     

民营企业跨国并购战略的制度创业过程研究

本研究采用案例研究方法,通过对中国林德集团收购德国帕西姆机场过程的分析,探索了新兴市场企业在成熟市场跨国并购过程中通过制度创业实现资源整合从而创造竞争优势的过程。本研究从制度视角探索了跨国并购的制度创业动因、机制和资源整合路径。突破了以往基于成熟市场的交易成本理论和组织学习理论通过股东收益和组织学习能力获取的传统跨国并购理论认识范式。研究发现,制度环境会影响组织通过制度创业建构合法性从而获得竞争优势资源;企业决策者的创业意愿和能力会影响企业制度创业成果;决策者意愿和能力与制度环境的互动机制影响制度创业效率;企业场域位势的嵌入程度较低以及处于业务和制度边界交界地带的企业,会实施制度创业改变企业的场域位势;企业通过制度创业跨越制度障碍形成的合法性成为企业新的竞争优势资源。     

The use of executive share-based compensation in Poland: investigating institutional and agency-based determinants in an emerging market

In this paper we investigate the under-researched topic of the use of executive share-based compensation in Poland, and we analyse empirically whether theoretical explanations developed and applied mainly in the context of developed countries also hold in this specific context. Building on agency and institutional theories we study the determinants of using executive share-based pay in 362 companies listed on the Warsaw Stock Exchange. As a result, we highlight the role of the state in Polish firms and the need to consider specifically principal–principal conflicts typical of emerging economies in post-state-socialist organisational research. Our findings not only reflect particularities of the institutional environment in the country studied but also highlight the limits of the traditional principal–agent lens applied in emerging economies.     

A comparative study of net entrepreneurial productivity in developed and post-transition economies

The paper develops net entrepreneurial productivity (NEP) as a complex latent construct of second order composed of productive, unproductive and destructive entrepreneurial activity. Its parameters were estimated using the partial least squares structural equation modeling method in the selected 15 developed and 7 post-transition economies for the average values in the period 2006-2013. The results unveil the direct and indirect effects between entrepreneurial activities, and between entrepreneurial activities and NEP, as well as that the level of NEP and productive entrepreneurial activity in developed economies is at a higher level compared with post-transition economies. The results suggest that for NEP and productive entrepreneurship to take place, regardless of the group of economies considered, an effective institutional environment that supports human capital development, fair competition and transparency should be established and maintained before developing more specific entrepreneurial programs and policies.     

The Impact of Institutional and Human Resource Distance on International Entry Strategies

'Distance' between organizational contexts has been a prime concern of scholarly research into international business strategies. We extend this research by exploring the complementary roles of institutional and human resource distances on foreign investors' entry strategies. Combining institutional and resource-based theories suggests that: (1) human resource differences complement institutional differences; (2) the effects of some aspects of distance are curvilinear; and (3) the impact of distance differs between first and subsequent entries. We find empirical support for these arguments on a unique dataset of foreign direct investment in six emerging economies that incorporates multiple host as well as multiple home countries.     

Founder nativity,founding team formation,and firm performance in the U.S. high-tech sector

This paper is motivated by the movement of foreign-born entrepreneurs out of ethnic enclaves and into the mainstream, globally-connected economies of the countries of immigration, and from necessity to opportunity entrepreneurship. The theoretical contribution of the paper is to integrate the emerging literature on foreign-born entrepreneurship with work on the composition and impact of founding teams. Empirically, we draw on original quantitative and qualitative data on the U.S. high-tech sector. We find that homophily drives team formation and that nationality diversity in founding teams has a modest impact on firm performance.     

Is it an institution,digital or social inclusion that matters for inclusive growth? A panel data analysis

This study empirically examines the impact of institutional quality, social inclusion and digital inclusion on inclusive growth across different economies characterized by different income groups. Particularly, the study examines the impact of institutions on inclusive growth by using the panel data for 83 countries over the period 2010–2017. For empirical specification, we used two-steps system-GMM estimation technique to tackle endogeneity and min–max normalized indexing technique to construct the indices for inclusive growth, social inclusion, digital inclusion and institutional quality. The results of this study show that there is a direct link between institutional quality and inclusive growth for a higher-income group of countries but not in the rest of the income groups. Contribution of social and digital inclusivity is significant in all three income groups, except for social inclusion in middle-income countries. From the policy point of view, these findings suggest that establishing and strengthening the institutional structure in low- and middle-income countries can contribute towards better and higher inclusive growth.

     

The impact of state legitimacy on entrepreneurial activity

The purpose of this research is to analyze the influence of the state legitimacy on of the different countries’ entrepreneurial activity’s development, the opportunities’ perception and the entrepreneurship’s motivations. This paper is set into the research field which analyze how the institutional environment influence entrepreneurship in different countries. Research framework has been built based on the Institutional Theory. To develop the model we use a set of data extracted from the European Social Survey and the Global Entrepreneurship Monitor about 28 European countries and we analyze them through Partial Least Squares-Structural Equation Modeling. Results show that state’s legitimacy influences the level of entrepreneurship in the different countries and the perception of the entrepreneurial opportunities and chances. Besides, the research shows that, in the scenario of the most legitimated countries, entrepreneurial activities is related to the need of self-employment. Based on the Institutional Theory, this research provide relevant contributions in the research field about entrepreneurship and countries’ institutions. From a practical point of view, the research shows ideas on how policymakers can improve entrepreneurial activity managing state legitimacy. Furthermore, the results provide new contributions in the research on the influence of the institutional context on the states entrepreneurial activity, providing an analysis and a comparison of the differences between countries, based on institutional theory.

     

中国高科技新创企业对发达国家的逆向投资——基于制度理论的分析视角

中国高科技新创企业通过逆向投资进军发达国家是近几年新出现的现象，传统的对外直接投资理论对此难以给出有效的解释。本文基于制度的视角对我国高科技新创企业逆向投资行为进行解释，从制度的三个维度论证我国高科技新创企业逆向投资是组织与制度互动的结果，在法律法规层面，新创企业到发达国家投资是逃避不合理的制度安排，寻求更为有利的融资与成长环境；在社会规范层面，到发达市场投资能够为高科技新创企业在国内赢得更多的社会声誉，进而获得更大的合法性；在认知层面，具有国际化经历的企业家具有较强的国际视野和国际化导向。     

The determinants of venture creation time: a cross-country perspective

The purpose of this paper is to examine the impact of macro-institutional and macro-non-institutional factors on the new venture creation time across emerging as well as developed economies in Europe using panel data from 2003 to 2006 in 15 emerging and developed countries. This paper finds significant relationships between the venture start-up time and institutional factors that include lending interest rates, start-up procedures, and taxation and one non-institutional factor, GDP per capita. Additionally, we found differences in the factors between emerging and developed countries. Institutional factors, such as start-up procedures and trade opportunities, are important determinants of new venture creation time in emerging countries, consistent with the findings of recent studies. To encourage business formation, policy makers may need to revise policies concerning these factors which can facilitate or restrict new venture formation. Implications for further research and practice are discussed.     

Sub‐National Institutional Contingencies,Network Positions,and IJV Partner Selection

The differences in sub‐national institutions within large and complex emerging economies have been increasingly noted. Drawing on social network theory and the institution‐based view, we argue that two network structural attributes of domestic firms – centrality and structural holes – have distinctive values in different sub‐national regions where institutional contexts differ widely. In addition, these sub‐national institutional contingencies influence the attractiveness of different network attributes to foreign entrants seeking international joint venture (IJV) partners. Specifically, in regions where the degree of marketization is high, centrally positioned domestic firms are more likely to be selected by foreign entrants as IJV partners. In regions where the degree of marketization is low, domestic broker firms are more attractive IJV partners. Results from the electrical and information technology industries in 18 provinces in China largely support our hypotheses.     

Entrepreneurship policy and systemic conditions: Evidence-based implications and recommendations for emerging countries

Entrepreneurship policies are now widely spread among the general policy agenda in most of the countries. In particular, emerging countries started to focus on startups and young firms as potential engines of economic growth and structural transformation. Therefore, several governments from these countries are devoting significant efforts to develop their entrepreneurial ecosystems and promote the emergence of new dynamic firms. However, data on entrepreneurship in these countries is scarce leaving policymakers without a clear evidence-based platform for designing their policies and programs. This paper tries to contribute to this task in two manners. First, it presents a systemic conceptual approach to guide the design of entrepreneurship policies that explicitly includes the structural factors acting act as barriers in less developed contexts. Secondly, Based on the information from the IDE (Index of Dynamic Entrepreneurship) this study advances into the characterization of six different configurations of systemic conditions – three of which include emerging countries – analyzing their main strengths and weaknesses. Hence, this article provides a new evidence-based platform to identify and discuss the heterogeneity among ecosystems in emerging countries and suggests several policy recommendations for those governments that want to implement new entrepreneurship policies. At the same time, they introduce to the literature new concepts such as ‘systemic balance’ and ‘dual ecosystems’, which serve to characterize most of the observed configurations of systemic conditions for entrepreneurship in less developed regions. All in all, the results of this study would serve to guide policymakers to formulate their policies in a more contextualized framework.     

Economic resilience and entrepreneurship: lessons from the Sheffield City Region

This article examines the relationship between economic resilience and entrepreneurship in city regions. Resilience is an emerging concept which has been employed to examine economic performance and responsiveness to exogenous shocks such as financial crisis and recession. Drawing on a literature review of academic articles in this emerging field and interviews with policy-makers in the Sheffield City Region of England, the article examines how entrepreneurship is central to sustain a dynamic economy and demonstrates that it is being fore-fronted in policy debates as a key aspect in creating more resilient economies. The article finds that entrepreneurship is integral to promoting the diversification and capacity building of regional economies, traits which are characteristic of (more) resilient economies. We advance the emerging literature through the development of a conceptual framework to highlight the links between economic resilience and entrepreneurship. In doing so, the article argues that entrepreneurship is critical to the restructuring and adaptation of local (city region) economies and draws out a series of recommendations concerning the wider policy implications of the study.     

Innovation-driven entrepreneurship in developing economies

The knowledge spillover theory of entrepreneurship (KSTE) has recently emerged as an influential research stream that examines the origin, development and economic impact of innovation-driven entrepreneurship. While empirical evidence has shown that the main premise of the KSTE generally holds in most advanced economies, the purpose of the present study is to investigate the extent to which the ideas advocated by the KSTE are generalizable to different contexts in developing countries. On applying a logistic multilevel analysis to a sample of almost 250,000 individuals across 45 developing countries, the results show that the different context found in developing economies produces a limited connection between knowledge spillovers, innovation and entrepreneurship in comparison with the conventional linkage studied in the KSTE literature.     

The Context of Entrepreneurial Judgment: Organizations,Markets, and Institutions

The economics and management literatures pay increasing attention to the technological, competitive, and institutional environment for entrepreneurship. However, less is known about how context influences the judgment of entrepreneurs. Focusing on the emerging judgment‐based approach to entrepreneurship, we argue that economics can say much about how the organizational, market, and institutional context shapes entrepreneurial judgment. We describe entrepreneurs as individuals who deploy scarce, heterogeneous resources to service customer preferences at a profit. Because of uncertainty, this process is essentially experimental, and context influences the experimental process. Thus, entrepreneurs will seek to design the internal organization of the firm so that it facilitates internal experimentation. Moreover, the market or task environment determines the need for experimentation (e.g., how fast do consumer preferences change, how does technology evolve, which assets are available at which terms, etc.). Finally, the institutional environment influences, for example, the transaction costs of acquiring and divesting assets as firms adjust their boundaries through ongoing commercial experimentation.     

FLY‐BY‐NIGHT BUILDERS IN HARBIN AND SHANGHAI

This paper examines residential property development in the Chinese cities of Harbin and Shanghai in 2001–07. It reveals that development firms generally only built one residential development during the study period, which contrasts with the situation in most developed countries, where large, established firms engage in numerous projects. This finding appears to contradict theories on economies of scale, brand names and reputation. It is argued that institutional failure may be largely responsible for the business practices observed.     

The Relevance of the Institutional Underpinnings of Porter's Five Forces Framework to Emerging Economies: An Epistemological Analysis

ABSTRACT Using the Toulmin method, we present an epistemological analysis of Porter's Five Forces Framework (FFF) in light of the increasing evidence pertaining to the institutional context in emerging economies. The analysis reveals three key qualifiers in the theoretical structure of FFF – transaction costs, capital flows and laws governing rivalry. Evidence from emerging economies indicates that FFF's assumptions about the qualifiers are not met in these economies. Indeed, firms in these economies adopt strategies not derivable from FFF to tackle their unique institutional contexts. Our Toulmin analysis helps pinpoint the directions for further research in emerging economies. Specifically, the three qualifiers provide a meaningful way of building typologies and taxonomies to accommodate the diversity of institutional contexts and to link them to firm-level strategies. Our discussion also highlights the need to turn the spotlight on laws governing rivalry, a relatively under-explored topic in emerging economies, and the effectiveness of different network strategies.     

Factors affecting peasant entrepreneurs’ intention in the Chinese context

In the extant literature, research attention has been largely given to explore the issue of Chinese peasant entrepreneurship based on strategic entrepreneurial perspective. The current study examines the intention of Chinese peasant entrepreneurs based on entrepreneurial behavior perspective and hypothesizes that self-efficacy positively moderates the relationship between the need for power and entrepreneurial intention and the relationship between institutional environment and entrepreneurial intention. An analysis of a sample of 298 Chinese peasants proved most of the hypotheses. Results show that the need for power has a positive influence on the entrepreneurial intentions of the selected low-social-status population. Results also reveal the positive effect of the institutional environment perceived by individuals on entrepreneurial intention. The finding indicates that the government can enhance the entrepreneurial intention of rural individuals by updating entrepreneurial policies, by training and education in entrepreneurial activities that target the rural masses, and by promoting a successful entrepreneurial model. Moreover, positive moderation of self-efficacy on the relationship between the need for power and entrepreneurial intention is proven, which indicates that the effects of these two factors on entrepreneurial intention mutually reinforce each other. The finding also indicates that moderation of self-efficacy on the relationship between the institutional environment and entrepreneurial intention is negative that shows that self-efficacy and institutional environment can substitute for each other.     

Institutional perspective of financial sector development: A multidimensional assessment

Financial sector development is a multidimensional process that plays a vital role in the economic growth and development of a country. This study investigates the effect of institutional quality on multidimensional financial sector development, and its dimensions, such as, depth, access, and efficiency. We used a panel dataset of 85 emerging and developing economies from 1996 to 2018 for analysis. Our findings based on 2SLS estimation demonstrate that institutional quality has a significant positive effect on the progress of the financial sector, especially its depth, access, and efficiency. The breakdown analysis shows that most of the key components (control of corruption, government effectiveness, regulatory quality, rule of law, and voice and accountability) of institutional quality enhance the financial sector development. Our empirical results are robust across alternative measures of institutional quality, split-sample analysis, alternative instrument, and estimator. This paper also offers useful policy implications to the stakeholders in emerging and developing economies.