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Entrepreneurs' Acceptance of Formal Institutions: A Cross-country Analysis


  • Andreas Freytag

    () (Friedrich-Schiller-University Jena, School of Economics and Business Administration)

  • Florian Noseleit

    () (European Centre for International Political Economy (ECIPE))


Institutional settings and the resulting incentive structures are crucial for economic development. The type of entrepreneurial activity and the entrepreneurial effort are especially dependent on underlying incentive structures. We argue that institutions with better incentive structures for entrepreneurs are perceived as being of higher quality by this group. We find empirical evidence that high institutional quality increases the willingness of the self-employed to accept these institutions. Furthermore, institutional quality affects the deviation in acceptance of self-employed to non-self-employed such that lower institutional quality is related to less acceptance by entrepreneurs compared to the rest of society.

Suggested Citation

  • Andreas Freytag & Florian Noseleit, 2009. "Entrepreneurs' Acceptance of Formal Institutions: A Cross-country Analysis," Jena Economic Research Papers 2009-047, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2009-047

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    References listed on IDEAS

    1. Oliver Falck & Stephan Heblich & Elke Lüdemann, 2009. "Identity and Entrepreneurship," CESifo Working Paper Series 2661, CESifo Group Munich.
    2. repec:nbr:nberch:3044 is not listed on IDEAS
    3. AndrewE. Clark & Nicolai Kristensen & Niels Westergård-Nielsen, 2009. "Job Satisfaction and Co-worker Wages: Status or Signal?," Economic Journal, Royal Economic Society, vol. 119(536), pages 430-447, March.
    4. Davidsson, Per & Honig, Benson, 2003. "The role of social and human capital among nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(3), pages 301-331, May.
    5. Ederer, Florian & Patacconi, Andrea, 2010. "Interpersonal comparison, status and ambition in organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 348-363, August.
    6. Mariassunta Giannetti & Andrei Simonov, 2009. "Social Interactions and Entrepreneurial Activity," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(3), pages 665-709, September.
    7. Cramer, J. S. & Hartog, J. & Jonker, N. & Van Praag, C. M., 2002. "Low risk aversion encourages the choice for entrepreneurship: an empirical test of a truism," Journal of Economic Behavior & Organization, Elsevier, vol. 48(1), pages 29-36, May.
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    Cited by:

    1. László Szerb & Éva Komlósi & Balázs Páger, 2016. "Measuring Entrepreneurship and Optimizing Entrepreneurship Policy Efforts in the European Union," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 14(3), pages 08-23, October.

    More about this item


    Entrepreneurship; self-employment; institutions; cross-country study;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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