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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.

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.

Female entrepreneurs have made increasing contributions to entrepreneurial activity and economic development worldwide, especially in emerging economies. It is well acknowledged that Bangladesh is one such South Asian emerging economy with many institutional and sociocultural challenges. This study aims to examine the effect of the institutional environment (formal and informal institutional factors) that influences female entrepreneurs in an emerging country, namely, Bangladesh.

The authors used a quantitative research method using a questionnaire. The authors established the conceptual framework reflecting a model so that they could test their assumptions among female entrepreneurs from an institutional perspective. The conceptual framework was empirically tested and validated. Consequently, this study comprised 324 usable survey responses. To analyse the quantitative data, partial least squares-structural equation modelling was used.

The findings highlight that social networks, access to finance and non-economic support have negative and insignificant effects on informal female entrepreneurs. Conversely, entrepreneurial attitudes, cultural context, institutional policy, family roles and education were positive and significant and found to be more important for female entrepreneurship in Bangladesh.

The results of this study offer empirical evidence of institutional factors as well as focus on three dimensions, women’s experiences from an institutional perspective, Asian culture and the operation of female entrepreneurial activity in an emerging economy (contextual perspective).

The success of a young entrepreneur depends on how institutional support can facilitate venture performance. Drawing on the institutional theory, this study posited the role of self-efficacy in supporting the effect of institutional support. Self-efficacy is a driving factor for entrepreneurs in managing and implementing business action confidently and successfully. With macro- and micro-oriented research, this study aims to examine how the micro-level factor that is self-efficacy could mediate the influence of macro-level factors (i.e. institutional governance, cultural and social norms and cognitive structure) toward iGen's new venture performance.

A total of 462 respondents representing the population of Malaysian iGen entrepreneurs participated in this study. The samples were selected using a multistage sampling technique (i.e. probability cluster sampling technique and non-probability purposive sampling). Survey items were adapted from the previous studies. Structural equation modelling was used, and the first stage involved testing confirmatory factor analysis (CFA) to test the measurement items' unidimensionality, validity and reliability. The second stage of analysis is to test the mediation model.

The mediation analysis results confirm that the relationship between institutional governance, cultural and social norms, cognitive structure and new venture performance is mediated by self-efficacy. The results confirm that the relationship between institutional governance and cultural and social norms toward new venture performance is fully mediated by self-efficacy. On the other hand, the relationship between cognitive structure and new venture performance is partially mediated by self-efficacy.

For future research, it is necessary to consider a wide-ranging sample size in improving research generalisation. Moreover, the cross-sectional study only observes the phenomenon at a certain point and cannot explain the process in the correlational relationship. Future researchers are encouraged to adopt a longitudinal study, which allows the researchers to study a sample throughout a period to draw firm conclusions. Survey data also raise the concern of common method variance (CMV), and future studies may use different data types to solve the problem. In addition, future studies are encouraged to examine other factors that could influence new venture performance.

This study extends the current literature on public policy and entrepreneurship. It comprehensively explains the relationship between institutional governance, cultural and social norms, cognitive structure and self-efficacy toward new venture performance. This study was also conducted in a developing country and iGen context, which can offer new insights into the current literature. Many empirical studies have applied institutional theory in examining entrepreneurship action and behaviour, yet the scholarly consecration on micro-level factors is limited. With macro- and micro-oriented research, this study has examined the influence of self-efficacy as a potential mediating variable.

Entrepreneurial activity is a phenomenon that increases the economic growth of countries and improves their social welfare. The economic development levels of countries have significant effects on these entrepreneurial activities. This research examines which institutional and macroeconomic variables explain early-stage entrepreneurship activities in developed and developing economies.

The authors conducted panel data analysis on the data from the Global Entrepreneurship Monitor (GEM) and International Monetary Fund (IMF) surveys covering the years 2009–2018.

First, the authors' results reveal that cognitive, normative and regulatory institutions and macroeconomic factors affect early-stage entrepreneurial activity in developed and developing countries differently. Second, the authors' findings indicate that cognitive, normative and regulatory institutions affect early-stage entrepreneurship more positively in developed than developing countries. Finally, the authors' results report that macroeconomic factors are more effective in early-stage entrepreneurial activity in developing countries than in developed countries.

This study provides a better understanding of the components that help explain the differences in entrepreneurship between developed and developing countries regarding institutions and macroeconomic factors. In this way, it contributes to developing entrepreneurship literature with the theoretical achievements of combining institutional theory and macroeconomic indicators with entrepreneurship literature.

The individuals take an active interest in society to change it into a better one. For this reason, this study aims to investigate the influence of patriotism with the institutional framework on social entrepreneurial orientation (SEO), which assists us in improving the social welfare activities with socially friendly business and business operations to maintain the existing organization position by engaging potential customers and starting a new social venture for gaining the institutional and external stakeholders support in the competitive environment.

In this study, the authors employed the quantitative offline survey approach to investigate the proposed relationship with 228 valid responses from entrepreneurial organizations holding social ventures as small or big projects in Pakistan.

This study’s findings revealed that patriotism positively affects SEO, and institutional support partially mediates the relationship between patriotism and SEO. While social valuation positively strengthens the relationship between patriotism and institutional support and patriotism and SEO. Likewise, experiential learning strengthens the positive relationship between institutional support and SEO.

This study found that institutional support is vital in helping entrepreneurs to create institutional designs and strategies to cope with dynamic and socioeconomic problems. Moreover, this study benefits policymakers and government officials to make strategic decisions based on a sense of self-worth by adopting the opportunities to raise public awareness about social organizations' importance and expand social capital.

The previous literature addresses patriotism mainly in social entrepreneurship instead of SEO. To the best of the authors’ knowledge, this study is the first to explore and show particular ways of SEO to country growth.

In this study, we question: how do the social costs of failure interact with gendered institutions to affect the early stage entrepreneurship activity? We address this question by employing the institutional theory and a unique dataset of 286,989 entrepreneurs across 35 countries.

To test our hypotheses, we use a multilevel modeling analysis that nests individual entrepreneurs within the countries. To capture individual and country-level variables, we constructed a unique dataset that combines data from the Global Entrepreneurship Monitor (GEM), European Flash Barometer (EUFB), World Bank Development Indicator (WDI), World Bank Doing Business Report (WBDB) and World Economic Forum (WEF).

Our analysis confirms that higher levels of the country-level gender equality positively correlate with the early-stage entrepreneurship activity of women. Moreover, we find that this positive relationship is amplified in institutional environments with high social costs of failure, suggesting that societal intolerance for failure can exacerbate the negative effect of gender inequality on the participation of women in entrepreneurship.

Our research contributes to academic interest on the role of legitimacy in women entrepreneurship and is of particular interest to international business scholars, seeking a better understanding of multidimensional construction of institutional frameworks across countries. In this study, we set out to address an important research question: how do the social costs of failure interact with gendered institutions to affect entrepreneurship activity? Our study provides a comprehensive portrait of gendered institutions by including the framework conditions of education, healthcare and political power. We found that in societies with gender equality, the likelihood of individuals engaging in the early-stage entrepreneurship activity is higher and that the positive relationship is strengthened in national environments with high social costs of failure.

Our study findings underscore the need for government policies addressing global gender gaps in economic empowerment. In particular, policies assisting women in obtaining education in high-growth industries like information technology or providing funding to women-dominated industries may foster activity for women seeking to do business in such industries. Such policies connect the early-stage entrepreneurship activities with gender equality concerns and initiatives.

Regarding the social costs of failure construct, specifically, prior studies generally focus narrowly on the context of failed entrepreneurs. We cast a wider net on men and women entrepreneurs’ entry decisions (irrespective of prior experience with business failure) and provide new views on the effects of social costs of failure on entrepreneurial ecosystems. We also extend the research on the legitimacy of women as entrepreneurs with the gender equality construct.

Unlike previous studies, which often focus on the “3Ms” of market, money and management, our research adopts a more holistic perspective. We recognize that the opportunities and challenges faced by entrepreneurs are shaped not only by individual skills and resources but also by the broader macroenvironment. By incorporating the framework conditions of education, healthcare and political power, alongside the intricate interplay of social costs and norms, our study paints a comprehensive picture of the landscape of female entrepreneurship.

Entrepreneurship is an activity of recognised economic and social interest, leading scholars to examine contextual factors that justify variations between economies and governments to configure more favourable conditions to entrepreneurial activity. In this sequence, this study aims to analyse the effect of reforms produced in the business environment on entrepreneurial rates of a set of 18 high-income economies.

A panel data (2010–2019) methodology was adopted using 10 Doing Business indicators from World Bank and Total early-stage Entrepreneurial Activity (TEA) from Global Entrepreneurship Monitor (GEM).

In the light of institutional theory, the study shows that improving the business environment for entrepreneurs does not ensure an increase in TEA. Specifically, only the indicators Dealing with Construction, Registering Property and Enforcing Contracts positively impacted the TEA.

This is the first study that monitors and provides evidence regarding the effectiveness of business environment reforms towards entrepreneurship. The authors provide considerable theoretical-practical implications for scholars, entrepreneurs and policymakers to restructure public policies to support entrepreneurial activity.

Although previous research has examined the role of franchising for the economic development of countries, no empirical study to date has investigated the importance of franchising for social, infrastructural, and institutional development. The authors address this research gap by applying research results from the field of sustainable entrepreneurship and highlight that franchising has a positive impact on economic, social, institutional and infrastructural development.

This study uses a fixed-effects model on a panel dataset for 2006–2015 from 49 countries to test the hypothesis that franchising positively influences various dimensions of country development such as economic social institutional and infrastructural development.

The findings highlight that franchising has a positive impact on the economic, social, infrastructural, and institutional development of a country. Specifically, the results show that the earlier and the more franchising systems enter a country, the stronger the positive impact of franchising on the country's economic, social, institutional, and infrastructural development.

This study has several limitations that provide directions for further research. First, the empirical investigation is limited by the characteristics of the data, which are composed of information from 49 countries (covering a period of 10 years). Because franchising is not recognized as a form of entrepreneurial governance in many emerging and developing countries, the available information is mainly provided by the franchise associations in the various countries. Hence, there is a need to collect additional data in each country and to include additional countries. Second, although the authors included developed and developing countries in the analysis, the authors could not differentiate between developed and developing countries when testing the hypotheses, because the database was not sufficiently complete. Third, future studies should analyze the causality issue between franchising and development more closely. The role of franchising in development may be changing depending on different unobserved country factors, economic sector characteristics, or development stages.

What are the practical implications of this study for the role of franchising in the development of emerging and developing economies? Because public policy in emerging and developing countries suffers from a lack of financial resources to improve the social, infrastructural and institutional environment, entrepreneurs, such as franchisors who expand into these countries, play an important role for these countries' development. In addition to their entrepreneurial role of exploring and exploiting profit opportunities, they are social, institutional, and political entrepreneurs who may positively influence country development (Schaltegger and Wagner, 2011; Shepard and Patzelt, 2011). Specifically, the findings highlight that countries with an older franchise sector (more years of franchise experience) may realize first-mover advantages and hence larger positive spillover effects on their economic, social, institutional and infrastructural development than countries with a younger franchise sector. Hence, governments of emerging and developing countries have the opportunity and responsibility to reduce potential market entry barriers and provide additional incentives for franchise systems in order to trigger these positive spillover effects. The authors expect that the spillover effects from the franchise sector on the economic, institutional, social and infrastructural development of a country are stronger in emerging and developing countries than in developed countries.

Previous research has focused on the impact of franchising on the economic development of a country, such as its growth of gross domestic product (GDP), employment, business skills, innovation and technology transfer. This study extends the existing literature by going beyond the impact of franchising on economic development: the results show that franchising as an entrepreneurial activity offers opportunities for economic, social, institutional, and infrastructural development, all of which are particularly important for emerging and developing economies. The findings of this study contribute to the international franchise and development economics literature by offering a better understanding of the impact of franchising on country development.