Interlinking institutions, entrepreneurship and economic performance

João J. M. Ferreira, Cristina Fernandes, Pedro Mota Veiga, Stephan Gerschewski

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)
160 Downloads (Pure)

Abstract

Purpose
This study holds the objective of evaluating the impact of formal (e.g. ease of doing business score, start-up procedures to register a business, property rights) and informal (e.g. school life expectancy, collaboration between companies and human capital) institutions on the economic performance of countries in conjunction with the mediating effect of entrepreneurial activities and social performance.

Design/methodology/approach
The authors collected quantitative, secondary data from a range of different sources, specifically the World Bank (WB), Global Entrepreneurship Monitor (GEM), World Economic Forum (WEF), Freedom House (FH) and Doing Business (DB) for the years between 2016 and 2018. The authors deployed a quantitative approach based on estimating structural equation models according to the Partial Least Squares (PLS) method.

Findings
The authors find that institutions, whether formal or informal, impact positively on economic and social performance with entrepreneurial activities positively mediating the relationship between informal institutions and economic performance and social performance.

Practical implications
The study research holds key implications for strengthening institutional theory. The authors find that our empirical results draw attention to the impact that institutions and their functioning can have on economic performance. Through this alert, the authors aim for researchers, politicians and other diverse decision-makers involved in public policies to prioritise not only the good working of institutions but also fostering entrepreneurship, in order to boost the resulting economic performance.

Originality/value
The study research contributes to the literature by testing the model that links institutions, entrepreneurial activity and economic performance. The authors also help policymakers to become aware of the importance that the quality of institutions has on entrepreneurial activity, and, consequently on economic performance.
Original languageEnglish
JournalInternational Journal of Entrepreneurial Behaviour & Research
Early online date4 Apr 2023
DOIs
Publication statusE-pub ahead of print - 4 Apr 2023

Keywords

  • institutional theory
  • entrepreneurship
  • Economic performance
  • formal institution
  • Informal institutions

ASJC Scopus subject areas

  • General Business,Management and Accounting

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