Market entry of firms with different legal forms: an empirical test of the influence of institutional factors

  • Saioa Arando
  • Iñaki Peña
  • Ingrid Verheul


Drawing upon institutional theory we develop a conceptual model and investigate the determinants of market entry for worker cooperatives, publicly traded and limited-liability companies. Our results show that formal institutional conditions (i.e., mercantile legislation) influence the start-up choice of entrepreneurs regarding the legal form of their new venture. In addition, we take into account the influence of informal institutional conditions (i.e., local corporate culture) on the market entry rate of firms with different legal structures. Findings show that, while market entry is sensitive to the general economic climate, entry rates of firms with a different legal structure respond differently to the same economic conditions.


Market entry Institutional theory Legal structure New ventures Entrepreneurship 


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© Springer Science + Business Media, LLC 2008

Authors and Affiliations

  1. 1.Department of Economics and Management, Basque Institute of CompetitivenessUniversity of DeustoDonostiaSpain
  2. 2.Rotterdam School of Economics, Centre for Advanced Small Business EconomicsErasmus University RotterdamRotterdamThe Netherlands

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