Asia Pacific Journal of Management

, Volume 32, Issue 1, pp 67–94

Economic and political institutions and entry into formal and informal entrepreneurship

Article

DOI: 10.1007/s10490-014-9381-0

Cite this article as:
Autio, E. & Fu, K. Asia Pac J Manag (2015) 32: 67. doi:10.1007/s10490-014-9381-0

Abstract

We investigated the influence of economic and political institutions on the prevalence rate of formal and informal entrepreneurship across 18 countries in the Asia-Pacific region during the period 2001–2010. We found the quality of institutions to exercise a substantial influence on both formal and informal entrepreneurship. One standard-deviation increase in the quality of economic and political institutions could double the rates of formal entrepreneurship and halve the rates of informal entrepreneurship. The two types of institutions had a complementary effect on driving entry into formal entrepreneurship, whereas only direct effects were observed for informal entry.

Keywords

Informal entrepreneurshipEconomic and political institutionsFormal entrepreneurshipPovertyEconomic development

Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.Imperial College Business SchoolLondon SW7 2AZUK
  2. 2.Department of Industrial Engineering and ManagementAalto UniversityEspooFinland