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The interaction of entrepreneurship and institutions

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  • HENREKSON, MAGNUS
  • SANANDAJI, TINO

Abstract

Previous research, notably Baumol (1990), has highlighted the role of insti-tutions in channeling entrepreneurial supply into productive, unproductive or destructive activities. However, entrepreneurship is not only influenced by institutions—entrepreneurs often help shape institutions themselves. The bilateral causal relation between entrepreneurs and institutions is examined in this paper. Entrepreneurs affect institutions in at least three ways. Entrepreneurship abiding by existing institutions is occasionally disruptive enough to challenge the foundations of prevailing institutions. Entrepreneurs sometimes have the opportunity to evade institutions, which tends to undermine the effectiveness of the institutions, or cause institutions to change for the better. Lastly, entrepreneurs can directly alter institutions through innovative political entrepreneurship. As business entrepreneurship, innovative political activity may be productive or unproductive, depending on the incentives facing entrepreneurs.
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Suggested Citation

  • Henrekson, Magnus & Sanandaji, Tino, 2011. "The interaction of entrepreneurship and institutions," Journal of Institutional Economics, Cambridge University Press, vol. 7(01), pages 47-75, March.
  • Handle: RePEc:cup:jinsec:v:7:y:2011:i:01:p:47-75_00
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    Cited by:

    1. Robin Douhan & Magnus Henrekson, 2010. "Entrepreneurship and second-best institutions: going beyond Baumol’s typology," Journal of Evolutionary Economics, Springer, vol. 20(4), pages 629-643, August.
    2. Roy Thurik & Marcus Dejardin, 2012. "Entrepreneurship and Culture," Post-Print halshs-00943684, HAL.
    3. Graham Brownlow, 2015. "Back to the failure: an analytic narrative of the De Lorean debacle," Business History, Taylor & Francis Journals, vol. 57(1), pages 156-181, January.
    4. Michael Fritsch & Sebastian von Engelhardt, 2010. "Who Starts with Open Source? Institutional Choice of Start-Ups in the German ICT Sector," Jena Economic Research Papers 2010-049, Friedrich-Schiller-University Jena.
    5. Henrekson, Magnus & Stenkula, Mikael, 2009. "Entrepreneurship and Public Policy," Working Paper Series 804, Research Institute of Industrial Economics.
    6. Sanandaji, Tino & Lakomaa, Erik, 2016. "Care, Commons and Entrepreneurship," SSE Working Paper Series in Economic History 2016:2, Stockholm School of Economics.
    7. repec:eee:jbvent:v:32:y:2017:i:5:p:461-475 is not listed on IDEAS
    8. Juan Carlos Tello, 2016. "Implicaciones culturales y socioeconómicas de la mujer como partícipe en el desarrollo y fortalecimiento de los sectores económicos: un análisis comparativo México-China," REVISTA DIGITAL MUNDO ASIA PACIFICO, UNIVERSIDAD EAFIT, vol. 5(9), December.
    9. Gregory M. Randolph, 2014. "Institutions and entrepreneurial productivity in the American states," Chapters,in: Entrepreneurial Action, Public Policy, and Economic Outcomes, chapter 6, pages 100-116 Edward Elgar Publishing.
    10. Julita E. Wasilczuk & Katarzyna Stankiewicz, 2017. "Unproductive Entrepreneurship - The Case Of The Polish Economy," GUT FME Working Paper Series A 45, Faculty of Management and Economics, Gdansk University of Technology.
    11. Niklas Elert & Magnus Henrekson, 2016. "Evasive entrepreneurship," Small Business Economics, Springer, vol. 47(1), pages 95-113, June.
    12. Welter, Friederike & Smallbone, David, 2015. "Creative forces for entrepreneurship: The role of institutional change agents," Working Papers 01/15, Institut für Mittelstandsforschung (IfM) Bonn.
    13. Pavel Kuchař, 2016. "Entrepreneurship and institutional change," Journal of Evolutionary Economics, Springer, vol. 26(2), pages 349-379, May.
    14. repec:kap:sbusec:v:49:y:2017:i:1:d:10.1007_s11187-017-9867-5 is not listed on IDEAS
    15. Gruševaja, Marina, 2010. "Governmental Learning as a Determinant of Economic Growth," IWH Discussion Papers 23/2010, Halle Institute for Economic Research (IWH).

    More about this item

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights

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