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This paper aims to evaluate the progress made in understanding the impact of multi-level institutions on entrepreneurship.

Based on scientific articles published between 1992 and 2017, the authors take a unique focus on both institutional theory applied and research topics of this area. Bibliometric method and systematic literature review method are used.

The results demonstrate that although institutional theory is well prepared for entrepreneurship context operating at different levels, the major knowledge foundation used predominantly focuses on macro and meso level. When it comes to research topics, entrepreneurship is often simplified as the founding of new venture, and the unique venture founding process has rarely been explored.

This paper is the first to provide a full picture of the multi-level institutions and their consequences on different kinds of entrepreneurial activities. The authors’evaluation of this research area also points out directions for future study.

The relationships among institutions, entrepreneurship, and economic growth are hotly contested topics. The objective of this present study is to conduct a systematic literature review aimed at comprehensively assessing the relationships between institutional pillars, entrepreneurship and economic growth.

Specifically, a comprehensive analysis of 141 empirical publications was carried out using the PRISMA protocol. The reviewed publications were taken from the Web of Science, Scopus and Google Scholar databases. Thirty-three articles that met the eligibility criteria of quality, relevance and timeliness of the publications were included in the the study.

Three key lessons emerged from the review. First, it was discovered that entrepreneurship and economic growth are influenced by three institutional pillars at various levels, including the regulatory, cognitive and normative pillars. Second, according to the type of institutional quality, the institutional pillars in a causal framework have a good or negative impact on entrepreneurship. Third, novel enterprise creation, self-employment, citizen employment, poverty alleviation, radical innovation, formalization of the informal sector, promotion of competition in existing and new markets, Gross Domestic Product (GDP) growth and the emergence of new business models that significantly improve quality of life.

The study proposes a conceptual framework for further exploring this important relationship based on solid empirical evidence. By providing a theoretically grounded framework, the paper fills the gaps in the literature and helps to clarify the relationship between institutional foundations, entrepreneurship and economic progress.

Informal entrepreneurship challenges sustainable economic performance and is a barrier to productive entrepreneurship. In this context, the level of development of formal and informal institutions and their impact on informal entrepreneurship is crucial. This chapter examines the informal sector entrepreneurship in Kosovo using institutional theory lenses. Using a survey with 500 owners/managers of private companies, the study finds that the service industry has the highest participation in the informal economy compared to other sectors. On average small firms, compared to larger ones, report a higher percentage of unreported incomes. Our findings also suggest that when informal entrepreneurs perceive penalties for tax avoidance from tax authorities as high, they tend to have higher compliance with reporting their income. In addition, our findings indicate that the higher the vertical (trust in formal institutions) and horizontal distrust (trust in business partners), the higher the involvement in the informal economy. The chapter concludes with some policy implications for tackling the informal economy in Kosovo and similar institutional contexts.

The impacts of institutional quality on entrepreneurship are well established. However, the effects of an external factor, such as the shadow economy, that moderates this relationship have largely been neglected in existing literature. As such, this paper investigates how the shadow economy moderates the effects of institutional quality on entrepreneurship in a global sample of 79 economies from 2006 to 2018, when the latest required data are available.

This paper utilizes the fixed-effect and generalized method of moments (GMM) estimation techniques. Various scenarios have been considered for the robustness of the analysis, including different estimation techniques, different estimates of the shadow economy and various subsamples of countries with different income levels.

Empirical findings indicate that improved institutional quality boosts entrepreneurship activities, while the extended shadow economy is associated with reduced entrepreneurship activities. Interestingly, the positive impacts of institutional quality on entrepreneurship will be lessened with a larger shadow economy. These findings have remained largely unchanged across samples of countries and different proxies and estimation techniques.

Findings from this paper offer policymakers the relationships between institutional quality, shadow economy and entrepreneurship and the moderating effects of shadow economy on the institutional quality–entrepreneurship nexus. The implication is that institutional quality should be strengthened while the shadow economy should be controlled to promote entrepreneurship initiatives.

To the best of the author's knowledge, this is the first empirical study to explore the moderating effects of the shadow economy on the institutional quality–entrepreneurship nexus.

The research aims to applying Baumol’s framework to address some research gaps in the literature. This paper aims to analyze how institutional variations at the subnational level impact entrepreneurship decisions and the path toward productive or unproductive entrepreneurship in an institutionally underdeveloped country. The results offer potentially new theoretical insights and practical implications for developing or emergent countries.

The research applies Baumol’s framework to Mexico’s context. The research collects data compounded by individual- and state-level variables from diverse sources for the 32 Mexican states. The individual level and some controls were obtained from sources of regular frequency, but the institutional variables were derived from surveys of irregular frequency, nonsynchronic and mostly nonoverlapping, which required aligning and centered them around 2016 and 2019 to match with the individual variables. The authors apply multilevel nonlinear mixed-effects probit regression to test nine hypotheses regarding the impact of institutional variables on entrepreneurial decisions and the path toward productive or unproductive entrepreneurship.

Improved formal institutions across the Mexican states reduce the entrepreneurship probability, implying interactions with other variables and indirect effects; encourage the selection of productive entrepreneurship, e.g. formal ventures; and discourage self-employment. Consequently, those institutions do not encourage entrepreneurship selection as an occupation but entrepreneurial quality, i.e. the selection of productive-formal entrepreneurship and larger ventures. Deficient informal institutions increase the entrepreneurship and formal entrepreneurship probabilities, implying the interactions with other variables and indirect effects and supporting the corruption “greases the wheels” hypothesis, consequently encouraging productive ventures. New evidence of the positive relationship between criminality and entrepreneurship types in Mexico is reported.

Our findings indicate important impacts of the individual-level variables on the entrepreneurship decisions and that most of those decisions are potentially necessity driven and a minority are driven by opportunity, given their relationship with the macroeconomic controls and the institutional variables. The authors report mixed results on the relationship between institutions and entrepreneurship partially consistent with the literature; some results contribute additional evidence on controversial hypotheses or imply the existence of indirect effects. Overall, the results suggest that institutions impact the individual decisions to venture and the type of venture consequently affecting the amount and quality of entrepreneurship across states.

The research addresses some of the literature gaps by providing empirical evidence on a middle-income country and how diverging regional institutional contexts, including formal and informal institutions, impact the individual’s entrepreneurship decisions within an institutionally underdeveloped country. The paper contributes new knowledge and insights into entrepreneurship in emerging or developing countries with implications for Baumol’s framework in this context and adds to the debated hypothesis on the relationship between some institutions, e.g. corruption and criminality and entrepreneurship.

The underlying assumptions of Baumol’s theory of entrepreneurial allocation limits its potential to answer some key questions related to the entrepreneurship allocation. Hence, this paper aims to highlight the inherent limits of Baumol’s theory and suggest a new approach for understanding the entrepreneur-institution relationship and their functions.

This is a conceptual paper with a narrow focus on the literature.

The paper argues that Baumol’s adherence to neoclassic economics assumptions about entrepreneur and institution, such as entrepreneurs as rational choice taker with predetermined goals or institutions as exogenous, limits the potential of his theoretical framework to explain productive entrepreneurship in weak institutional settings. As such, underlying on Austrian economics assumptions about entrepreneur and his/her agency, this paper proposes a reconceptualization of productive entrepreneurship as an outcome of the interaction between entrepreneur and context.

Going beyond Baumol’s main proposition of one-sided influence of institutions on entrepreneurship allocation, this research highlights the influence of individual factors and entrepreneurial action on choosing entrepreneurial paths by entrepreneurs. So, future policies to stimulate productive entrepreneurship should consider these factors and go beyond Baumol’s mere focus on institutional improvement.

Going beyond one-sided influence of institutions on entrepreneurship allocation, this paper suggests an interaction centric approach which considers the role of actors and institutions as the co-creator of each other in the social process and argues that any effort for explaining the entrepreneurship should consider the co-creative nature of the actors and institutions as well as the endogenous nature of institutions. The proposed approach will help expanding entrepreneurship literature through finding answers to some key under-examined questions in the promising research stream of entrepreneurship allocation.

The purpose of this paper is to improve understanding of how different aspects of the national institutional environment may influence the extent of innovative entrepreneurial activities across countries. Several institutional and conductive factors affecting a country’s capacity to support innovative entrepreneurship are explored.

Institutional theory is used to examine the national regulatory, normative, cognitive and conducive aspects that measure a country’s ability to support innovative entrepreneurship. A cross-national institutional profile is constructed to validate an entrepreneurial innovation model. The impacts of country-level national institutions on innovative entrepreneurial activity as measured by Global Entrepreneurship Monitor data are assessed through structural equation modeling.

Knowledge about the influence of specific institutional aspects on innovative entrepreneurship, and hence of institutional structures within and across countries, is enhanced. For new innovative enterprises, conductive and regulatory aspects seem to matter most. All conductive factors have a significant and positive impact on entrepreneurial activity rates.

Results could support policy makers and practitioners in evaluating government policies’ effects on innovative entrepreneurship. Interventions should target both individual attributes and context. Future research could include longitudinal designs to measure the direction of causality.

Aspects such as regulatory institutions, and conductive factors such as information communication technology use and technology adoption, are important for innovation entrepreneurship development.

The literature on institutional theory and innovative entrepreneurship is highly limited. This study complements growing interest in empirical analysis of the effects of national institutions on innovative entrepreneurial activities and substantiates previous empirical work.

The purpose of this paper is to examine the mediating role of corruption in the relationship between entrepreneurship and institutional quality in a sample of 90 countries from all around the world.

The data were collected from the Global Entrepreneurship Monitor, which developed a model where Corruption Perception Index as a proxy for corruption mediates the relationship between the variable rule of law as a proxy for institutional quality and opportunity entrepreneurship as a proxy for productive entrepreneurship. Correlation, Baron and Kenny approach (causal steps approach) and PROCESS Macro (normal test theory) developed by Hayes were used to find out the direct and indirect effects of institutional quality between corruption and entrepreneurship.

The bootstrap mediation results indicated that institutional quality was a significant predictor of corruption and corruption was a significant predictor of entrepreneurship. These findings support the mediation hypothesis. In addition, findings showed that there is a negative relation between corruption and productive entrepreneurship and a positive relation between institutional quality and productive entrepreneurship.

The current study only considered the single proxy for institutional quality, i.e. rule of law; therefore, some other proxies for institutional quality such as government effectiveness and doing business can be used for future studies. Moreover, the proposed model does not control for the country differences like GDP or development stages of countries.

The findings of this study indicate that the total association between institutional quality and entrepreneurship is not only direct but also that rule of law contributes to levels of entrepreneurship through reduced levels of corruption. As a result, countries with higher levels of rule of law tended to experience corruption at lower levels, which in turn contributed to the emergence of increased levels of entrepreneurship. Furthermore, these results may be beneficial for organizations fighting against corruption, because entrepreneurial activity can be add to the group of economical drivers constrained by corruption. It is also beneficial for policy makers who focus on promoting entrepreneurship, since one way to increase entrepreneurial activity is to lower the existing corruption level.

The results indicated that the direct effect of institutional quality on the entrepreneurship remained significant when controlling for corruption, thus suggesting partial mediation. In other words, corruption only mediates part of the effect of institutional quality on entrepreneurship, that is, the intervention (institutional quality) has some residual direct effect even after the mediator (corruption) was introduced into the model.

Entrepreneurial intentions have traditionally been linked to an entrepreneur's personal ability to take advantage of opportunities. Yet, entrepreneurs' perceptions of contextual factors, which extend beyond one's control, deserve equal attention. This paper looks at the role played by cultural intelligence and the institutional environment in shaping entrepreneurial intentions.

The role played by cultural intelligence in entrepreneurial intentions and the mediating role played by the institutional environment were studied quantitatively by analyzing 224 young potential entrepreneurs who had participated in a business plan competition. This study used cross-sectional data, developing an original full collinearity assessment approach to check for any common method bias.

This study reveals a positive relationship between cultural intelligence and entrepreneurial intentions. Likewise, any favorable perceptions of the institutional environment tend to increase the probability of engaging in entrepreneurship and further strengthen the positive effect of cultural intelligence on entrepreneurial intentions.

This study provides a holistic view of the relationship between the entrepreneur and the context in which ventures are created, explaining the role played by cultural intelligence in entrepreneurship based on evidence drawn from a developing country. This contributes to a critical reflection on personal and environmental factors and the antecedents of entrepreneurial intentions.

While diaspora entrepreneurs remain important sources of capital and innovation, many developing countries are facing serious challenges to tap into these sources because of their weak institutional settings and the endemic and systemic corruption. To this end, this study explores how institutional reforms and control of corruption can influence diaspora entrepreneurship. This study also seeks to provide perspectives on how diaspora entrepreneurs can influence institutional reforms and market policies.

To meet these objectives, qualitative and interpretive research approaches were employed.

Using responses collected from Haitian diaspora entrepreneurs living in the USA, this paper highlights different attributes of institutional reforms and control of corruption that can influence diaspora entrepreneurship.

Based on these insights, this paper argues that Haitian diaspora entrepreneurs need to play a proactive role as policy entrepreneurs by supporting competent and well-intention political leaders to gain office and by joining forces with local actors to advocate for institutional reforms, market reforms and control of corruption in order to be able to exploit market opportunities. In this respect, further perspectives for diaspora entrepreneurship, limitations and consideration for future research are highlighted.

By collecting insights on institutional reform and diaspora entrepreneurship from diaspora entrepreneurs, this paper makes important contribution to the entrepreneurship literature.