Institutional entrepreneurs on opportunity formation and exploitation in strategic new industry : Two cases of solar energy industry development in China

Abstract

Purpose

The purpose of this paper is to examine the role of institutional entrepreneurship in opportunity formation and opportunity exploitation in developing emerging strategic new industries.

Design/methodology/approach

The paper reviews the focal literature focussing on institutional entrepreneurs’ role in opportunity formation with special attention to opportunities for institutional entrepreneurs in emerging economy. A multi-method approach consisting of historical case studies and event sequencing is applied to track the historical development of the solar energy industry in two case contexts and to investigate the role of institutional entrepreneurs in this process.

Findings

Investigation of two cases illustrates that different types of institutional entrepreneur, as represented by individual entrepreneurs and local government, in the context of massive institutional change – such as the Grand Western Development Program and the Thousand Talents Program in China – have varied effects on triggering and inducing institutional change and innovation to explore and exploit opportunities in emerging new industries.

Practical implications

The significance of local context for the nature and scope of institutional entrepreneurship in emerging economy is worthy of further research. The top-down process of institutional innovation dominated by local government might cause myopic outcome and distortion of market opportunities. Indigenous individual entrepreneurs with well-accumulated political capital and strong perceived responsibility could be the main actors to introduce incremental institutional change by combining bottom-up and top-down processes and promoting sustained new industry development through creating and seizing institutional opportunities and market opportunities.

Originality/value

This paper illustrates the close relationship between institutional environment and opportunity formation in emerging economies, contributes to the understanding of contextualizing institutional entrepreneurs in different regional contexts and discloses the problems involved in local government acting as an institutional entrepreneur.

Citation

Cao, X., Liu, Y. and Cao, C. (2014), "Institutional entrepreneurs on opportunity formation and exploitation in strategic new industry : Two cases of solar energy industry development in China", International Journal of Emerging Markets, Vol. 9 No. 3, pp. 439-458. https://doi.org/10.1108/IJoEM-09-2012-0109