Publication: Institutions and Entrepreneurial Activity: The Interactive Influence of Misaligned Formal and Informal Institutions
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2018-06-15
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Abstract
We contribute to the institutions and entrepreneurship literature by examiningthe interactive influence of formal and informal institutions on new business creation,survival, and growth. Prior literature demonstrates how formal and informal institutionsshape the level of entrepreneurship. This paper extends this to examine the cases whenformal and informal institutions conflict with one another to cast an analytic eye on whycountries differ in the type of entrepreneurial activity in terms of entry, survival, andgrowth. We argue that national and regional differences can be better explained by theinteractive influence of formal and informal institutions. Moreover, we argue that infor-mal institutions dominate formal institutions due to the former’s characteristics of deepembeddedness and resistance to change over time. These ideas are presented and summa-rized into a typology of institutional effects on entrepreneurship activity depending on thecombination of formal and informal institutions. The paper concludes with implicationsfor future theory and research on the joint influence of different institutional effects andparticularly on the intersection between institutions and entrepreneurship.
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Attribution 4.0 International
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IE Business School
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Eesley, C. E., Eberhart, R. N., Skousen, B. R., & Cheng, J. L. (2018). Institutions and entrepreneurial activity: The interactive influence of misaligned formal and informal institutions. Strategy Science, 3(2), 393-407. https://doi.org/10.1287/stsc.2018.0060.