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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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    3. Awaworyi Churchill, Sefa & Smyth, Russell, 2020. "Ethnic diversity, energy poverty and the mediating role of trust: Evidence from household panel data for Australia11We thank two referees for constructive comments. This article uses unit record data ," Energy Economics, Elsevier, vol. 86(C).
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    5. 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.
    6. 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.
    7. 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.
    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.
    9. 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.
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    11. 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.

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