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Fractionalization, entrepreneurship, and the institutional environment for entrepreneurship

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  • Sefa Awaworyi Churchill

    (Monash University)

Abstract

The vast majority of the literature on ethnicity and entrepreneurship focuses on the construct of ethnic entrepreneurship. However, very little is known about how ethnic heterogeneity affects entrepreneurship, and the institutional arrangements affecting entrepreneurship. This study attempts to fill the gap, and thus examines the effect of ethnic heterogeneity on various outcomes associated with entrepreneurship and the institutional environment for entrepreneurship. Using indices of ethnic and linguistic fractionalization, we show that ethnic heterogeneity negatively influences entrepreneurship. We argue that potential channels that can explain the negative effect of fractionalization on entrepreneurship include trust, social network, and innovation, among others. This study provides a new perspective on the existing debate that seeks to understand why the levels of entrepreneurial success vary across countries.

Suggested Citation

  • Sefa Awaworyi Churchill, 2017. "Fractionalization, entrepreneurship, and the institutional environment for entrepreneurship," Small Business Economics, Springer, vol. 48(3), pages 577-597, March.
    • Handle: RePEc:kap:sbusec:v:48:y:2017:i:3:d:10.1007_s11187-016-9796-8
    DOI: 10.1007/s11187-016-9796-8
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    7. Sefa Awaworyi Churchill & Yeti Nisha Madhoo & Shyam Nath, 2022. "Ethnic diversity and firm performance: Evidence from India," ASARC Working Papers 2022-01, The Australian National University, Australia South Asia Research Centre.
    8. Awaworyi Churchill, Sefa & Munyanyi, Musharavati Ephraim & Smyth, Russell & Trinh, Trong-Anh, 2021. "Early life shocks and entrepreneurship: Evidence from the Vietnam War," Journal of Business Research, Elsevier, vol. 124(C), pages 506-518.
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    11. Sefa Awaworyi Churchill & Bin Peng & Russell Smyth & Quanda Zhang, 2022. "R&D intensity and income inequality in the G7: 1870–2016," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(3), pages 263-282, July.
    12. Michael A. Abebe & Yamlaksira S. Getachew & Sarah Kimakwa, 2022. "Entrepreneurs’ Ethnic and Political Identity Alignment as Determinants of Access to Government Support in Africa: A Conceptual Framework," Entrepreneurship Theory and Practice, , vol. 46(2), pages 449-476, March.
    13. Dabić, Marina & Vlačić, Bozidar & Paul, Justin & Dana, Leo-Paul & Sahasranamam, Sreevas & Glinka, Beata, 2020. "Immigrant entrepreneurship: A review and research agenda," Journal of Business Research, Elsevier, vol. 113(C), pages 25-38.
    14. Aziz N. Berdiev & Rajeev K. Goel & James W. Saunoris, 2020. "Dimensions of Ethnic Diversity and Underground Economic Activity: Cross-country Evidence," Public Finance Review, , vol. 48(2), pages 178-211, March.
    15. Henri Njangang & Youssouf Nvuh-Njoya, 2023. "Unravelling the link between democracy and economic complexity: fresh evidence from the Varieties of Democracy data," SN Business & Economics, Springer, vol. 3(3), pages 1-32, March.
    16. Dimitris Balampanidis, 2017. "Diversity and entrepreneurship in the city of Athens: Different views and ambiguous perceptions of local entrepreneurs," Argomenti, University of Urbino Carlo Bo, Department of Economics, Society & Politics, vol. 8(8), pages 1-24, September.
    17. Tom'av{s} Evan & Vladim'ir Hol'y, 2021. "Cultural Diversity and Its Impact on Governance," Papers 2112.11563, arXiv.org.
    18. Julien Hanoteau & Virginie Vial, 2020. "Institutional quality, conforming and evasive entrepreneurship," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(1), pages 97-121, March.
    19. Carlo Corradini, 2022. "Social trust and new firm formation: a regional perspective," Small Business Economics, Springer, vol. 58(1), pages 169-184, January.
    20. Julien Hanoteau & Gandhi Pawitan & Virginie Vial, 2021. "Does social capital reduce entrepreneurs' petty corruption? Evidence across Indonesian regions," Papers in Regional Science, Wiley Blackwell, vol. 100(3), pages 651-670, June.
    21. Ljunge, Martin & Stenkula, Mikael, 2021. "Fertile soil for intrapreneurship: impartial institutions and human capital," Journal of Institutional Economics, Cambridge University Press, vol. 17(3), pages 489-508, June.
    22. Usman Khalid & Mohammad Amin, 2023. "The impact of ethnic fractionalisation on labor productivity: Does firm size matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 2213-2249, October.
    23. David B. Audretsch & Maksim Belitski & Georg Eichler, 2021. "Bilingualism and in cross-border entrepreneurship," Revista de Economía Laboral - Spanish Journal of Labour Economics, Asociación Española de Economía Laboral - AEET, vol. 18, pages 14-29.
    24. Awaworyi Churchill, Sefa & Smyth, Russell, 2021. "Locus of control and energy poverty," Energy Economics, Elsevier, vol. 104(C).

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