Does entrepreneurial activity matter for economic growth in developing countries? The role of the institutional environment

Abstract

The discussion on which institutions determine entrepreneurial activity – and the role of institutions in the aggregated output for developing countries – is as yet unresolved. The extant literature about entrepreneurship recognizes new ventures as potential mechanisms for long-term development. Yet, there is a consensus on the lack of evidence, particularly for these countries. Drawing on institutional economics, this article explores the interrelationships among institutional environment, entrepreneurial activity, and economic growth. To this end, we use simultaneous-equation panel data models for a sample of 14 developing countries (78 observations) over the period of 2004–2012. The main findings suggest a causal chain running from institutions to opportunity entrepreneurship, which is linked to the economic growth of emerging economies. In particular, we find that institutional factors – such as the number of procedures to start a new business, private credit coverage ,, and access to communication– influence entrepreneurial activity driven by opportunity. Policy implications for developing countries could be derived in order to enhance their economic performance through entrepreneurial activity.

This is a preview of subscription content, access via your institution.

Fig. 1

References

  1. Acemoglu, D., Gallego, F. A., & Robinson, J. A. (2014). Institutions, human capital, and development. Annual Review of Economics, 6, 875–912.

    Google Scholar 

  2. Acs, Z. J., & Amorós, J. E. (2008). Entrepreneurship and competitiveness dynamics in Latin America. Small Business Economics, 31, 305–322.

    Google Scholar 

  3. Acs, Z. J., & Armington, C. (2006). Entrepreneurship, geography and American economic growth. Cambridge: Cambridge University Press.

    Google Scholar 

  4. Acs, Z. J., & Szerb, L. (2007). Entrepreneurship, economic growth and public policy. Small Business Economics, 28, 109–122.

    Google Scholar 

  5. Acs, Z., & Virgill, N. (2010). Entrepreneurship in developing countries. Foundations and Trends in Entrepreneurship, 6, 1–68.

    Google Scholar 

  6. Acs, Z., Desai, S., & Klapper, L. F. (2008). What does “entrepreneurship” data really show? Small Business Economics, 31, 265–281.

    Google Scholar 

  7. Acs, Z. J., Braunerhjelm, P., Audretsch, D. B., & Carlsson, B. (2009). The knowledge spillover theory of entrepreneurship. Small Business Economics, 32, 15–30.

    Google Scholar 

  8. Acs, Z. J., Audretsch, D. B., Braunerhjelm, P., & Carlsson, B. (2012). Growth and entrepreneurship. Small Business Economics, 39, 289–300.

    Google Scholar 

  9. Ács, Z. J., Autio, E., & Szerb, L. (2014). National systems of entrepreneurship: Measurement issues and policy implications. Research Policy, 43, 476–494.

    Google Scholar 

  10. Acs, Z., Åstebro, T., Audretsch, D., & Robinson, D. T. (2016). Public policy to promote entrepreneurship: A call to arms. Small Business Economics, 47, 35–51.

    Google Scholar 

  11. Agarwal, R., Audretsch, D., & Sarkar, M. B. (2007). The process of creative construction: Knowledge spillovers, entrepreneurship, and economic growth. Strategic Entrepreneurship Journal, 1, 263–286.

    Google Scholar 

  12. Aidis, R., Estrin, S., & Mickiewicz, T. (2008). Institutions and entrepreneurship development in Russia: A comparative perspective. Journal of Business Venturing, 23, 656–672.

    Google Scholar 

  13. Aidis, R., Estrin, S., & Mickiewicz, T. M. (2012). Size matters: Entrepreneurial entry and government. Small Business Economics, 39, 119–139.

    Google Scholar 

  14. Aldrich, H. E., & Cliff, J. E. (2003). The pervasive effects of family on entrepreneurship: Toward a family embeddedness perspective. Journal of Business Venturing, 18, 573–596.

    Google Scholar 

  15. Alrawadieh, Z., & Alrawadieh, Z. (2018). Exploring entrepreneurship in the sharing accommodation sector: Empirical evidence from a developing country. Tourism Management Perspectives, 28, 179–188.

    Google Scholar 

  16. Alvarez, S. A., Young, S. L., & Woolley, J. L. (2015). Opportunities and institutions: A co-creation story of the king crab industry. Journal of Business Venturing, 30, 95–112.

    Google Scholar 

  17. Ansari, S., Munir, K., & Gregg, T. (2012). Impact at the ‘bottom of the pyramid’: The role of social capital in capability development and community empowerment. Journal of Management Studies, 49, 813–842.

    Google Scholar 

  18. Aparicio, S., Urbano, D., & Audretsch, D. (2016a). Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence. Technological Forecasting and Social Change, 102, 45–61.

    Google Scholar 

  19. Aparicio, S., Urbano, D., & Gómez, D. (2016b). The role of innovative entrepreneurship within Colombian business cycle scenarios: A system dynamics approach. Futures, 81, 130–147.

    Google Scholar 

  20. Arenius, P., & De Clercq, D. (2005). A network-based approach on opportunity recognition. Small Business Economics, 24, 249–265.

    Google Scholar 

  21. Arenius, P., & Minniti, M. (2005). Perceptual variables and nascent entrepreneurship. Small Business Economics, 24, 233–247.

    Google Scholar 

  22. Arin, K. P., Huang, V. Z., Minniti, M., Nandialath, A. M., & Reich, O. F. (2015). Revisiting the determinants of entrepreneurship: A Bayesian approach. Journal of Management, 41, 607–631.

    Google Scholar 

  23. Arshed, N., Carter, S., & Mason, C. (2014). The ineffectiveness of entrepreneurship policy: Is policy formulation to blame? Small Business Economics, 43, 639–659.

    Google Scholar 

  24. Audretsch, D. (2012). Entrepreneurship research. Management Decision, 50, 755–764.

    Google Scholar 

  25. Audretsch, D. B. (2014). From the entrepreneurial university to the university for the entrepreneurial society. The Journal of Technology Transfer, 39, 313–321.

    Google Scholar 

  26. Audretsch, D. B., & Keilbach, M. (2004a). Does entrepreneurship capital matter? Entrepreneurship Theory and Practice, 28, 419–429.

    Google Scholar 

  27. Audretsch, D., & Keilbach, M. (2004b). Entrepreneurship capital and economic performance. Regional Studies, 38, 949–959.

    Google Scholar 

  28. Audretsch, D. B., & Keilbach, M. (2005). Entrepreneurship capital and regional growth. The Annals of Regional Science, 39, 457–469.

    Google Scholar 

  29. Audretsch, D. B., & Keilbach, M. (2008). Resolving the knowledge paradox: Knowledge-spillover entrepreneurship and economic growth. Research Policy, 37, 1697–1705.

    Google Scholar 

  30. Audretsch, D. B., & Link, A. N. (2019). Entrepreneurship and knowledge spillovers from the public sector. International Entrepreneurship and Management Journal, 15, 195–208.

    Google Scholar 

  31. Audretsch, D. B., Bönte, W., & Keilbach, M. (2008). Entrepreneurship capital and its impact on knowledge diffusion and economic performance. Journal of Business Venturing, 23, 687–698.

    Google Scholar 

  32. Audretsch, D. B., Heger, D., & Veith, T. (2015). Infrastructure and entrepreneurship. Small Business Economics, 44, 219–230.

    Google Scholar 

  33. Autio, E., & Fu, K. (2015). Economic and political institutions and entry into formal and informal entrepreneurship. Asia Pacific Journal of Management, 32, 67–94.

    Google Scholar 

  34. Baltagi, B. (2005). Econometric analysis of panel data (3rd ed.). London: Wiley.

    Google Scholar 

  35. Baron, R. A. (2006). Opportunity recognition as pattern recognition: How entrepreneurs “connect the dots” to identify new business opportunities. The Academy of Management Perspectives, 20, 104–119.

    Google Scholar 

  36. Baron, R. A., & Ensley, M. D. (2006). Opportunity recognition as the detection of meaningful patterns: Evidence from comparisons of novice and experienced entrepreneurs. Management Science, 52, 1331–1344.

    Google Scholar 

  37. Baumol, W. J. (1990). Entrepreneurship: Productive, unproductive, and destructive. Journal of Political Economy, 98, 893–921.

    Google Scholar 

  38. Baumol, W. J., & Strom, R. J. (2007). Entrepreneurship and economic growth. Strategic Entrepreneurship Journal, 1(3–4), 233–237.

    Google Scholar 

  39. Begley, T. M., Tan, W.-L., & Schoch, H. (2005). Politico-economic factors associated with interest in starting a business: A multi-country study. Entrepreneurship Theory and Practice, 29, 35–55.

    Google Scholar 

  40. Belitski, M., Chowdhury, F., & Desai, S. (2016). Taxes, corruption, and entry. Small Business Economics, 47, 201–216.

    Google Scholar 

  41. Bennett, D. L. (2019). Infrastructure investments and entrepreneurial dynamism in the US. Journal of Business Venturing, 34, 1–28.

    Google Scholar 

  42. Bernat, L. F., Lambardi, G., & Palacios, P. (2017). Determinants of the entrepreneurial gender gap in Latin America. Small Business Economics, 48, 727–752.

    Google Scholar 

  43. Bjørnskov, C., & Foss, N. (2013). How strategic entrepreneurship and the institutional context drive economic growth. Strategic Entrepreneurship Journal, 7, 50–69.

    Google Scholar 

  44. Bjørnskov, C., & Foss, N. J. (2016). Institutions, entrepreneurship, and economic growth: What do we know and what do we still need to know? Academy of Management Perspectives, 30, 292–315.

    Google Scholar 

  45. Black, S. E., & Strahan, P. E. (2002). Entrepreneurship and bank credit availability. The Journal of Finance, 57, 2807–2833.

    Google Scholar 

  46. Bleaney, M., & Nishiyama, A. (2002). Explaining growth: A contest between models. Journal of Economic Growth, 7, 43–56.

    Google Scholar 

  47. Block, J. H., Fisch, C. O., & van Praag, M. (2017). The Schumpeterian entrepreneur: A review of the empirical evidence on the antecedents, behaviour and consequences of innovative entrepreneurship. Industry and Innovation, 24, 61–95.

    Google Scholar 

  48. Boettke, P.J., Coyne, C.J., 2009. Context matters: Institutions and entrepreneurship. Foundations and Trends® in Entrepreneurship 5, 135-209.

  49. Bosma, N. (2013). The global entrepreneurship monitor (GEM) and its impact on entrepreneurship research. Foundations and Trends in Entrepreneurship, 9, 143–248.

    Google Scholar 

  50. Bosma, N., Content, J., Sanders, M., & Stam, E. (2018). Institutions, entrepreneurship, and economic growth in Europe. Small Business Economics, 51, 483–499.

    Google Scholar 

  51. Braunerhjelm, P., Acs, Z. J., Audretsch, D. B., & Carlsson, B. (2010). The missing link: Knowledge diffusion and entrepreneurship in endogenous growth. Small Business Economics, 34, 105–125.

    Google Scholar 

  52. Bruno, R. L., Bytchkova, M., & Estrin, S. (2013). Institutional determinants of new firm entry in Russia: A cross-regional analysis. Review of Economics and Statistics, 95, 1740–1749.

    Google Scholar 

  53. Bruton, G. D., Ahlstrom, D., & Obloj, K. (2008). Entrepreneurship in emerging economies: Where are we today and where should the research go in the future. Entrepreneurship Theory and Practice, 32, 1–14.

    Google Scholar 

  54. Bruton, G. D., Ahlstrom, D., & Puky, T. (2009). Institutional differences and the development of entrepreneurial ventures: A comparison of the venture capital industries in Latin America and Asia. Journal of International Business Studies, 40, 762–778.

    Google Scholar 

  55. Bruton, G. D., Ahlstrom, D., & Li, H.-L. (2010). Institutional theory and entrepreneurship: Where are we now and where do we need to move in the future? Entrepreneurship Theory and Practice, 34, 421–440.

    Google Scholar 

  56. Bruton, G. D., Ketchen Jr., D. J., & Ireland, R. D. (2013). Entrepreneurship as a solution to poverty. Journal of Business Venturing, 28, 683–689.

    Google Scholar 

  57. Bruton, G., Khavul, S., Siegel, D., & Wright, M. (2015). New financial alternatives in seeding entrepreneurship: Microfinance, crowdfunding, and peer-to-peer innovations. Entrepreneurship Theory and Practice, 39(1), 9–26.

    Google Scholar 

  58. Carlsson, B., Braunerhjelm, P., Mckelvey, M., Olofsson, C., Persson, L., & Ylinenpää, H. (2013). The evolving domain of entrepreneurship research. Small Business Economics, 41, 913–930.

    Google Scholar 

  59. Carree, M., Van Stel, A., Thurik, R., & Wennekers, S. (2002). Economic development and business ownership: An analysis using data of 23 OECD countries in the period 1976–1996. Small Business Economics, 19, 271–290.

    Google Scholar 

  60. Carree, M., van Stel, A., Thurik, R., & Wennekers, S. (2007). The relationship between economic development and business ownership revisited. Entrepreneurship and Regional Development, 19, 281–291.

    Google Scholar 

  61. Chowdhury, F., Audretsch, D. B., & Belitski, M. (2019). Institutions and entrepreneurship quality. Entrepreneurship Theory and Practice, 43, 51–81.

    Google Scholar 

  62. Coad, A., Frankish, J. S., Roberts, R. G., & Storey, D. J. (2016). Why should banks provide entrepreneurship training seminars? International Small Business Journal, 34, 733–759.

    Google Scholar 

  63. Cumming, D., Johan, S., & Zhang, M. (2014). The economic impact of entrepreneurship: Comparing international datasets. Corporate Governance: An International Review, 22, 162–178.

    Google Scholar 

  64. Cumming, D., Johan, S., & Zhang, Y. (2018). Public policy towards entrepreneurial finance: Spillovers and the scale-up gap. Oxford Review of Economic Policy, 34, 652–675.

    Google Scholar 

  65. Davidsson, P., Recker, J., & von Briel, F. (2018). External enablement of new venture creation: A framework. Academy of Management Perspectives. https://doi.org/10.5465/amp.2017.0163.

  66. Djankov, S., La Porta, R., Lopez-De-Silanes, F., & Shleifer, A. (2002). The regulation of entry. Quarterly Journal of Economics, 117, 1–37.

    Google Scholar 

  67. Djankov, S., Ganser, T., McLiesh, C., Ramalho, R., & Shleifer, A. (2010). The effect of corporate taxes on investment and entrepreneurship. American Economic Journal: Macroeconomics, 2, 31–64.

    Google Scholar 

  68. Elert, N., & Henrekson, M. (2017). Entrepreneurship and institutions: A bidirectional relationship. Foundations and Trends in Entrepreneurship, 13, 191–263.

    Google Scholar 

  69. Fatoki, O., & Odeyemi, A. (2010). The determinants of access to trade credit by new SMEs in South Africa. African Journal of Business Management, 4, 2763–2770.

    Google Scholar 

  70. Ferreira, J. J., Fayolle, A., Fernandes, C., & Raposo, M. (2017). Effects of Schumpeterian and Kirznerian entrepreneurship on economic growth: Panel data evidence. Entrepreneurship and Regional Development, 29, 27–50.

    Google Scholar 

  71. Fotopoulos, G., & Storey, D. J. (2019). Public policies to enhance regional entrepreneurship: Another programme failing to deliver? Small Business Economics, 53, 189–209.

    Google Scholar 

  72. Fritsch, M., & Wyrwich, M. (2018). Regional knowledge, entrepreneurial culture, and innovative start-ups over time and space―an empirical investigation. Small Business Economics, 51, 337–353.

    Google Scholar 

  73. Fuentelsaz, L., González, C., & Maicas, J. P. (2019). Formal institutions and opportunity entrepreneurship. The contingent role of informal institutions. BRQ Business Research Quarterly, 22(1), 5–24.

    Google Scholar 

  74. Glaeser, E. L., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2004). Do institutions cause growth? Journal of Economic Growth, 9, 271–303.

    Google Scholar 

  75. Gnyawali, D. R., & Fogel, D. S. (1994). Environments for entrepreneurship development: Key dimensions and research implications. Entrepreneurship Theory and Practice, 18, 43–62.

    Google Scholar 

  76. Gries, T., & Naudé, W. (2011). Entrepreneurship and human development: A capability approach. Journal of Public Economics, 95, 216–224.

    Google Scholar 

  77. Guerrero, M., Cunningham, J. A., & Urbano, D. (2015). Economic impact of entrepreneurial universities’ activities: An exploratory study of the United Kingdom. Research Policy, 44, 748–764.

    Google Scholar 

  78. Hechavarría, D. M., & Ingram, A. E. (2019). Entrepreneurial ecosystem conditions and gendered national-level entrepreneurial activity: A 14-year panel study of GEM. Small Business Economics, 53, 431–458.

    Google Scholar 

  79. Herrington, M., Kew, J., Kew P., (2009). Global entrepreneurship monitor, South African report. [Online]. Available: http://www.gbs.nct.ac.za/gbswebb/userfiles/gemsouthafrica2000pdf

  80. Hughes, M., Ireland, R. D., & Morgan, R. E. (2007). Stimulating dynamic value: Social capital and business incubation as a pathway to competitive success. Long Range Planning, 40, 154–177.

    Google Scholar 

  81. Intriligator, M., Bodkin, R., & Hsiao, C. (1996). Econometric models, techniques and applications (2nd ed.). Upper Saddle River: Prentice Hall.

    Google Scholar 

  82. Langowitz, N., & Minniti, M. (2007). The entrepreneurial propensity of women. Entrepreneurship Theory and Practice, 31, 341–364.

    Google Scholar 

  83. Levie, J., & Autio, E. (2008). A theoretical grounding and test of the GEM model. Small Business Economics, 31, 235–263.

    Google Scholar 

  84. Liñán, F., & Fernandez-Serrano, J. (2014). National culture, entrepreneurship and economic development: Different patterns across the European Union. Small Business Economics, 42, 685–701.

    Google Scholar 

  85. Maas, G., Herrington, M., (2006). Global entrepreneurship monitor South Africa report. [online]. Available: http://www.gemconsortium.org/document.aspx?id756.

  86. Manolova, T. S., Eunni, R. V., & Gyoshev, B. S. (2008). Institutional environments for entrepreneurship: Evidence from emerging economies in Eastern Europe. Entrepreneurship Theory and Practice, 32, 203–218.

    Google Scholar 

  87. Marlow, S., & Patton, D. (2005). All credit to men? Entrepreneurship, finance, and gender. Entrepreneurship Theory and Practice, 29, 717–735.

    Google Scholar 

  88. Martínez, C., & Puentes, E. (2018). Micro-entrepreneurship debt level and access to credit: Short-term impacts of a financial literacy program. The European Journal of Development Research, 30, 613–629.

    Google Scholar 

  89. Mazzucato, M. (2013). The entrepreneurial state: Debunking private vs. public sector myths. London: Anthem Press.

    Google Scholar 

  90. McAdam, M., Crowley, C., & Harrison, R. T. (2019). “To boldly go where no [man] has gone before”-institutional voids and the development of women's digital entrepreneurship. Technological Forecasting and Social Change, 146, 912–922.

    Google Scholar 

  91. McMullen, J. S., Wood, M. S., & Kier, A. S. (2016). An embedded agency approach to entrepreneurship public policy: Managerial position and politics in new venture location decisions. The Academy of Management Perspectives, 30, 222–246.

    Google Scholar 

  92. Minniti, M. (2016). The Foundational Contribution to Entrepreneurship Research of William J. Baumol. Strategic Entrepreneurship Journal, 10, 214–228.

    Google Scholar 

  93. Minniti, M., & Lévesque, M. (2010). Entrepreneurial types and economic growth. Journal of Business Venturing, 25, 305–314.

    Google Scholar 

  94. Mueller, P. (2007). Exploiting entrepreneurial opportunities: The impact of entrepreneurship on growth. Small Business Economics, 28, 355–362.

    Google Scholar 

  95. Muñoz, P., & Cohen, B. (2018). A compass for navigating sharing economy business models. California Management Review, 61, 114–147.

    Google Scholar 

  96. Naudé, W. (2010). Entrepreneurship, developing countries, and development economics: New approaches and insights. Small Business Economics, 34, 1–12.

    Google Scholar 

  97. Naudé, W. (2011). Entrepreneurship is not a binding constraint on growth and development in the poorest countries. World Development, 39, 33–44.

    Google Scholar 

  98. Ngoasong, M. Z. (2018). Digital entrepreneurship in a resource-scarce context: A focus on entrepreneurial digital competencies. Journal of Small Business and Enterprise Development, 25, 483–500.

    Google Scholar 

  99. North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge: Cambridge University Press.

    Google Scholar 

  100. North, D. C. (2005). Understanding the process of economic change. Princeton: Princeton University Press.

    Google Scholar 

  101. North, D. C., & Thomas, R. P. (1973). The rise of the Western world: A new economic history. Cambridge: Cambridge University Press.

    Google Scholar 

  102. Noseleit, F. (2013). Entrepreneurship, structural change, and economic growth. Journal of Evolutionary Economics, 23, 735–766.

    Google Scholar 

  103. Öner, M. A., & Kunday, Ö. (2016). A study on Schumpeterian and Kirznerian entrepreneurship in Turkey: 2006–2013. Technological Forecasting and Social Change, 102, 62–71.

    Google Scholar 

  104. Ozgen, E., & Baron, R. A. (2007). Social sources of information in opportunity recognition: Effects of mentors, industry networks, and professional forums. Journal of Business Venturing, 22, 174–192.

    Google Scholar 

  105. Padilla-Pérez, R., & Gaudin, Y. (2014). Science, technology and innovation policies in small and developing economies: The case of Central America. Research Policy, 43, 749–759.

    Google Scholar 

  106. Prantl, S., & Spitz-Oener, A. (2009). How does entry regulation influence entry into self-employment and occupational mobility? The Economics of Transition, 17, 769–802.

    Google Scholar 

  107. Rahim, H. L., & Mohtar, S. (2015). Social entrepreneurship: A different perspective. International Academic Research Journal of Business and Technology, 1, 9–15.

    Google Scholar 

  108. Reynolds, P., Bosma, N., Autio, E., Hunt, S., De Bono, N., Servais, I., Lopez-Garcia, P., & Chin, N. (2005). Global entrepreneurship monitor: Data collection design and implementation 1998-2003. Small Business Economics, 24, 205–231.

    Google Scholar 

  109. Rodrik, D. (2003). In search of prosperity: Analytic narratives on economic growth. Princeton: Princeton University Press.

    Google Scholar 

  110. Romer, P. M. (1986). Increasing returns and long-run growth. The Journal of Political Economy, 94, 1002–1037.

    Google Scholar 

  111. Sahut, J. M., & Peris-Ortiz, M. (2014). Small business, innovation, and entrepreneurship. Small Business Economics, 42, 663–668.

    Google Scholar 

  112. Salimath, M. S., & Cullen, J. B. (2010). Formal and informal institutional effects on entrepreneurship: A synthesis of nation-level research. International Journal of Organizational Analysis, 18, 358–385.

    Google Scholar 

  113. Sanchis Llopis, J. A., Millán, J. M., Baptista, R., Burke, A., Parker, S. C., & Thurik, R. (2015). Good times, bad times: Entrepreneurship and the business cycle. International Entrepreneurship and Management Journal, 11, 243–251.

    Google Scholar 

  114. Sanyang, S. E., & Huang, W. C. (2010). Entrepreneurship and economic development: The EMPRETEC showcase. International Entrepreneurship and Management Journal, 6, 317–329.

    Google Scholar 

  115. Schillo, R. S., Persaud, A., & Jin, M. (2016). Entrepreneurial readiness in the context of national systems of entrepreneurship. Small Business Economics, 46, 619–637.

    Google Scholar 

  116. Schramm, C. J. (2006). The entrepreneurial imperative. New York: Collins.

    Google Scholar 

  117. Schumpeter, J. A. (1911). The theory of economic development: An inquiry into profits, capital, credit, interest, and the business cycle. Transaction Books.

  118. Shane, S. (2009). Why encouraging more people to become entrepreneurs is bad public policy. Small Business Economics, 33, 141–149.

    Google Scholar 

  119. Siu, W. S., & Martin, R. G. (1992). Successful entrepreneurship in Hong Kong. Long Range Planning, 25, 87–93.

    Google Scholar 

  120. Stenholm, P., Acs, Z. J., & Wuebker, R. (2013). Exploring country-level institutional arrangements on the rate and type of entrepreneurial activity. Journal of Business Venturing, 28, 176–193.

    Google Scholar 

  121. Stiglitz, J. E., & Weiss, A. (1981). Credit rationing in markets with imperfect information. The American Economic Review, 71, 393–410.

    Google Scholar 

  122. Stuetzer, M., Obschonka, M., Audretsch, D. B., Wyrwich, M., Rentfrow, P. J., Coombes, M., Shaw-Taylor, L., & Satchell, M. (2016). Industry structure, entrepreneurship, and culture: An empirical analysis using historical coalfields. European Economic Review, 86, 52–72.

    Google Scholar 

  123. Swason, D., & Webster, L. (1992). Private sector manufacturing in the Czech and Slovak Republic: A survey of firms. Washignton DC: The World Bank.

    Google Scholar 

  124. Tanas, J. K., & Audretsch, D. B. (2011). Entrepreneurship in transitional economy. International Entrepreneurship and Management Journal, 7, 431–442.

    Google Scholar 

  125. Terjesen, S., & Amorós, J. E. (2010). Female entrepreneurship in Latin America and the Caribbean: Characteristics, drivers and relationship to economic development. The European Journal of Development Research, 22, 313–330.

    Google Scholar 

  126. Thornton, P. H., Ribeiro-Soriano, D., & Urbano, D. (2011). Socio-cultural factors and entrepreneurial activity: An overview. International Small Business Journal, 29, 105–118.

    Google Scholar 

  127. Urbano, D. (2006). New business creation in Catalonia: Support measures and attitudes towards entrepreneurship. Barcelona: CIDEM.

  128. Urbano, D., & Aparicio, S. (2016). Entrepreneurship capital types and economic growth: International evidence. Technological Forecasting and Social Change, 102, 34–44.

    Google Scholar 

  129. Urbano, D., Aparicio, S., & Querol, V. (2016). Social progress orientation and innovative entrepreneurship: An international analysis. Journal of Evolutionary Economics, 26, 1033–1066.

    Google Scholar 

  130. Urbano, D., Aparicio, S., & Noguera, M. (2018). Institutions, gender, and entrepreneurship in Latin America. In L. J. Sanchez-Barrios & L. Gomez-Nunez (Eds.), Evolving entrepreneurial strategies for self-sustainability in vulnerable American communities (pp. 19–41). Pennsylvania: IGI Global.

    Google Scholar 

  131. Urbano, D., Turro, A., & Aparicio, S. (2019a). Innovation through R&D activities in the European context: Antecedents and consequences. The Journal of Technology Transfer, 1–24. https://doi.org/10.1007/s10961-019-09752-x.

  132. Urbano, D., Aparicio, S., & Audretsch, D. B. (2019b). Institutions, entrepreneurship, and economic performance. Cham: Springer International Publishing.

    Google Scholar 

  133. Urbano, D., Aparicio, S., & Audretsch, D. (2019c). Twenty-five years of research on institutions, entrepreneurship, and economic growth: What has been learned? Small Business Economics, 53, 21–49.

    Google Scholar 

  134. Valliere, D., & Peterson, R. (2009). Entrepreneurship and economic growth: Evidence from emerging and developed countries. Entrepreneurship and Regional Development, 21, 459–480.

    Google Scholar 

  135. Van Auken, H. E., & Neely, L. (1999). Obstacles to business launch. Journal of Developmental Entrepreneurship, 4, 175–187.

  136. van Gelderen, M., Thurik, R., & Bosma, N. (2005). Success and risk factors in the pre-startup phase. Small Business Economics, 24, 365–380.

    Google Scholar 

  137. van Praag, C. M., & Versloot, P. H. (2007). What is the value of entrepreneurship? A review of recent research. Small Business Economics, 29, 351–382.

    Google Scholar 

  138. van Stel, A., & Carree, M. (2004). Business ownership and Sectoral growth: An empirical analysis of 21 OECD countries. International Small Business Journal, 22, 389–419.

    Google Scholar 

  139. van Stel, A., Carree, M., & Thurik, R. (2005). The effect of entrepreneurial activity on national economic growth. Small Business Economics, 24, 311–321.

    Google Scholar 

  140. van Stel, A., Storey, D. J., & Thurik, A. R. (2007). The effect of business regulations on nascent and young business entrepreneurship. Small Business Economics, 28, 171–186.

    Google Scholar 

  141. von Broembsen, M., Wood, E., Herrington, M., (2005). Global entrepreneurship monitor South Africa report. [online]. Available: http://www.gsb.uct.ac.za/gsbwebb/userfiles/gem.pdf

  142. Wang, S.-Y. (2012). Credit constraints, job mobility, and entrepreneurship: Evidence from a property reform in China. Review of Economics and Statistics, 94, 532–551.

    Google Scholar 

  143. Welter, F. (2005). Entrepreneurial behavior in differing environments. In D. B. Audretsch, H. Grimm, & C. W. Wessner (Eds.), Local heroes in the global village globalization and the new entrepreneurship policies. International studies in entrepreneurship (pp. 93–112). New York: Springer.

    Google Scholar 

  144. Welter, F. (2011). Contextualizing entrepreneurship—Conceptual challenges and ways forward. Entrepreneurship Theory and Practice, 35, 165–184.

    Google Scholar 

  145. Wennekers, S., & Thurik, R. (1999). Linking entrepreneurship and economic growth. Small Business Economics, 13, 27–56.

    Google Scholar 

  146. Wennekers, S., van Stel, A., Thurik, R., & Reynolds, P. (2005). Nascent entrepreneurship and the level of economic development. Small Business Economics, 24, 293–309.

    Google Scholar 

  147. Williamson, O. E. (2000). The new institutional economics: Taking stock, looking ahead. Journal of Economic Literature, 38, 595–613.

    Google Scholar 

  148. Wong, P. K., Ho, Y. P., & Autio, E. (2005). Entrepreneurship, innovation and economic growth: Evidence from GEM data. Small Business Economics, 24, 335–350.

    Google Scholar 

  149. Wood, M. S., & Mckinley, W. (2017). After the venture: The reproduction and destruction of entrepreneurial opportunity. Strategic Entrepreneurship Journal, 11, 18–35.

    Google Scholar 

  150. Wooldridge, J. M. (2010). Econometric analysis of cross-section and panel data (2nd ed.). Cambridge: MIT Press.

    Google Scholar 

  151. Wright, M., Pruthi, S., & Lockett, A. (2005). International venture capital research: From cross-country comparisons to crossing borders. International Journal of Management Reviews, 7, 135–165.

    Google Scholar 

  152. Zellner, A., & Theil, H. (1962). Three-stage least squares: Simultaneous estimation of simultaneous equations. Econometrica, 30, 54–78.

    Google Scholar 

  153. Zhai, Q., Su, J., Ye, M., & Xu, Y. (2019). How do institutions relate to entrepreneurship: An integrative model. Entrepreneurship Research Journal, 9, 1–16.

    Google Scholar 

Download references

Acknowledgments

The authors acknowledge Maria Minniti and anonymous reviewers for valuable comments and suggestions. In addition, David Urbano and Maria Noguera acknowledge the financial support from project ECO2017-87885-P (Spanish Ministry of Economy & Competitiveness) and David Urbano acknowledges 2017-SGR-1056 (Economy & Knowledge Department, Catalan Government) and ICREA under ICREA Academia programme. Sebastian Aparicio acknowledges Durham University Business School for constant support. Additionally, Sebastian acknowledges COLCIENCIAS Ph.D. programme (617/2013), as well as Sapiencia-Enlaza Mundos (Municipio de Medellín) for financial support during Ph.D. studies.

Author information

Affiliations

Authors

Corresponding author

Correspondence to David Urbano.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendices

Appendix 1

Table 4 List of countries

Appendix 2

Table 5 Results of simultaneous equations for a larger sample of developed and developing countries

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Urbano, D., Audretsch, D., Aparicio, S. et al. Does entrepreneurial activity matter for economic growth in developing countries? The role of the institutional environment. Int Entrep Manag J 16, 1065–1099 (2020). https://doi.org/10.1007/s11365-019-00621-5

Download citation

Keywords

  • Institutions
  • Entrepreneurial activity
  • Economic growth
  • Developing countries