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The impact of weak formal institutions on the different phases of the entrepreneurial process

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  • Junaid, Danish
  • He, Zheng
  • Afzal, Farman

Abstract

While many studies examine the impact of weak formal institutions on nascent entrepreneurial activity, little attention is paid to how weak formal institutions affect the other three phases of the entrepreneurial process, i.e., intentions to start a business, new business activity, and established business. To fill this gap, this study examined how weak market and state institutions influence different phases of the entrepreneurial process. This study used data from the Global Entrepreneurship Monitor, the Index of Economic Freedom and the World Governance Indicators for 74 countries from 2008 to 2016, and applied multilevel modeling to conduct an empirical analysis. We found mixed effects of weak formal institutions on different entrepreneurial phases. In particular, weak market institutions restrict all phases of the entrepreneurial process, i.e. entrepreneurial intentions, nascent entrepreneurial activity and new business activity and established business. Weak state institutions facilitate new business activity and established business phases of the entrepreneurial process.

Suggested Citation

  • Junaid, Danish & He, Zheng & Afzal, Farman, 2022. "The impact of weak formal institutions on the different phases of the entrepreneurial process," Journal of Business Research, Elsevier, vol. 144(C), pages 236-249.
    • Handle: RePEc:eee:jbrese:v:144:y:2022:i:c:p:236-249
    DOI: 10.1016/j.jbusres.2022.01.040
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    Cited by:

    1. Pramendra Singh Tank, 2023. "Unlocking the Power of Accelerators: The Crucial Role of Institutions in Boosting New Venture Performance," IIMA Working Papers WP 2023-04-04, Indian Institute of Management Ahmedabad, Research and Publication Department.

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