1 Introduction

When an armed conflict between countries or within a country comes to an end, a post-conflict phase starts. Following the definition of the Upsala Conflict Data Program (USDP) such a phase requires a stop of armed hostilities and an annual tally of battle-related deaths below 25. This transitional phase is often characterized by the triumph of one party, the commencement of peace negotiations, and/or the establishment of a ceasefire (Kreutz 2010). Many countries are (or were) in such a situation.Footnote 1 Such post-conflict countries frequently remain in a state of instability and struggle with a legacy of violence over a long time (Junne and Verkoren 2005). They are often poor and characterized by political instability, economic problems and social unrest (Brown et al. 2009). There is no universally fixed duration for a post-conflict phase, and it can last for years or even decades in some cases. Signs that a post-conflict phase comes to an end are the establishment of stability and security through disarmament, the restoration of law and order, the implementation of peace agreements, and ultimately, the resolution of the underlying issues.

Developing countries that are in a post-conflict phase, which account for approximately 1.8 billion people worldwide (OECD 2018; UNDP 2019), is an important challenge of our time (George et al. 2016). Governments and governmental institutions have undertaken efforts to support these countries in their transitions to peace and economic stability (Reychler and Langer 2006). During such transition processes, the countries are typically fragile, and recurring instances of violence challenge the peacebuilding efforts (Junne and Verkoren 2005). However, peace and functioning legal systems present important prerequisites for sustainable development and are among the main goals of the United Nations (George et al. 2016; UN 2015). The ways in which countries address these challenges vary, and different approaches to post-conflict reconstruction can be observed (OECD 2007, 2016; World Bank 1998). Many of these approaches have in common that they aim to establish an environment where business activity can prosper. Entrepreneurial activity, in particular, has been argued to be a way to achieve fast progress in rebuilding efforts, sustainable economic development and the transition of post-conflict countries (Berdal and Mousavizadeh 2010; Bozzoli et al. 2013; Bray 2009; Castillo 2003; Desai 2011; Kang and Meernik 2005; Kusago 2005; Rapp and Olbrich 2021). However, entrepreneurship in a post-conflict environment differs from entrepreneurship in a normal business context. The post-conflict environment constitutes a specific context for entrepreneurial activities, and our knowledge from the literature about entrepreneurship and entrepreneurship policy cannot be simply applied. This calls for a contextualized view of entrepreneurship that considers the particular historical, temporal, institutional, spatial, and social context of post-conflict countries and societies (Welter 2011). However, to date, the knowledge regarding the role and impact of entrepreneurship in a post-conflict context is fragmented across a multitude of disciplines, research fields, and academic journals. Our study aims to consolidate and structure this literature in a systematic and integrative way (Kraus et al. 2020). Our review is guided by the following two research questions: How does the post-conflict context affect the entrepreneurial process? What is the impact of entrepreneurship on post-conflict countries?

Answering these questions is important to understand whether, how and under which circumstances entrepreneurship can support post-conflict countries on their way to economic recovery and peacebuilding (Acs 2006). In our efforts to structure the literature and develop a conceptual model we are guided by prior research about the entrepreneurial process in different contexts (Welter 2011; Welter and Baker 2020). Accordingly, we classify the identified literature in four distinct categories: where and when entrepreneurship occurs in post-conflict countries, who is involved and why, how entrepreneurship occurs and with what impact. Our literature review comprises 71 articles from 2001 to 2022. We conduct a comprehensive, evidence-based and content-centric review of the current body of knowledge, identify research gaps and offer ideas for future research about entrepreneurship in a post-conflict context.

Our review contributes to entrepreneurship research in two ways. Our first contribution concerns the literature on entrepreneurship in post-conflict countries (e.g., Bardasi et al. 2011; Boudreaux 2007; de Mel et al. 2014; Krasniqi 2007; Riddle and Brinkerhoff 2011). This literature stream is not only highly fragmented but also multi- and interdisciplinary and lacks a summary of the current evidence. Even more importantly, it lacks a clear conceptual and theoretical perspective or model that incorporates the existing knowledge and provides a starting point for impactful future research. The result of our literature review is such a conceptual model based on concepts from the broader entrepreneurship literature contextualized to the specific context of post-conflict countries. Our study reveals the mechanisms of how entrepreneurship is influenced by a post-conflict context and shows how entrepreneurship affects the economic recovery and peacebuilding in post-conflict countries. In light of the political efforts undertaken in this area and given the current global developments, answering these questions is more important than ever. Furthermore, our model helps to identify promising research gaps and provides avenues for future research.

Our second contribution refers to the discussion of context in entrepreneurship research (Welter 2011; Welter and Baker 2020). The results of our study show that the interplay of entrepreneurship and context is not a unilateral process but a bidirectional one. The phenomenon of entrepreneurship in post-conflict countries is a good example of how the contextualized view of entrepreneurship can be understood as both a top-down and a bottom-up process (Welter 2011). The particular context of post-conflict countries determines where, when, and how entrepreneurship is pursued by whom, why, and with what impact (top-down) and how entrepreneurship changes and affects the situation in post-conflict countries through economic recovery and peacebuilding (bottom-up).

Next to these contributions to the literature, our study helps policy-makers in post-conflict countries and guides them in their transition efforts using entrepreneurship (policy) to put their countries on a path to economic recovery and peace (Abramov 2009; Desai 2011; Krasniqi 2007; Tobias and Boudreaux 2011). Our review provides evidence about the impacts of specific entrepreneurship initiatives and programs and under what conditions such an impact occurs. It shows possible directions for targeted programs and initiatives to support entrepreneurship in post-conflict countries.

2 Conceptual foundations and research questions

This section briefly describes our understanding of the main concepts in our study, namely post-conflict country, entrepreneurship, and (entrepreneurship) context. These concepts are then used to formulate our research questions.

Post-conflict countries are countries where a prior warfare situation has come to an end, and which are in a transition period to peace. A post-conflict period, as defined by the Upsala Conflict Data Program (UCDP), refers to the time period after an armed conflict. Such an armed conflict is characterized by three elements: (1) a declared incompatibility, (2) the involvement of organized groups, including at least one government entity, and (3) the occurrence of armed activities leading to a minimum of 25 battle-related deaths within a given year (Kreutz 2010). As per this definition, a conflict is considered terminated once the armed activities have come to an end and the number of battle-related deaths within a year falls below 25. In addition, such a situation is typically marked by the victory of one party, the start of peace negotiations and/or a ceasefire agreement (Kreutz 2010).

Entrepreneurship is not a single task or step but a process that unfolds over time (Baron 2007; Shane and Venkataraman 2000). Shane (2003) puts entrepreneurship into a framework describing the steps of the entrepreneurial process and considers the influence of the environment and the individual on the process. The entrepreneurial process is about opportunities that must be created or discovered (Ramoglou and Gartner 2022), then exploited and finally realized. Whether these opportunities are discovered and how they are exploited, however, depends on the individuals involved and their specific characteristics (psychological and demographic). Furthermore, Shane (2003) highlights that environmental factors can affect the entrepreneurial process in various ways.

Shane's primary focus lies in the entrepreneurial process and does not explicitly explore contextual aspects. This gap is closed by the contributions of Welter (2011) and Welter and Baker (2020), who conduct a comprehensive examination of context as a critical determinant in shaping entrepreneurial (decision-making) processes. According to their context model of entrepreneurship, context comprises a temporal (when) and a local (where) dimension, which is the spatial location where entrepreneurship occurs (Welter 2011). The where dimension can be further subdivided into business, social, spatial and institutional contexts (Welter 2011). While the business context involves industry and market conditions such as the industry life-cycle stages and market competition, the social context refers to the structure and density of social networks as well as household and family conditions. The spatial context covers the influence of geographical characteristics such as the infrastructure of a country and local communities. Lastly, the institutional context includes cultural and societal characteristics as well as the political and economic system (Welter 2011). Context can either be an asset or a liability for entrepreneurship as it provides individuals with entrepreneurial opportunities and influences their choices on how to exploit those opportunities (Rapp and Olbrich 2021) but also sets boundaries to their actions (Fernandes and Ferreira 2022). Hence, in addition to the questions about who becomes involved, why individuals act and how the entrepreneurial process unfolds, the context in which individuals act and in which entrepreneurship takes place must be viewed as an overarching element (Welter 2011; Welter and Baker 2020). Welter and Baker (2020) further argue that an impact dimension needs to be considered and that this dimension is not unilateral but bidirectional, that is, the context not only influences entrepreneurship but entrepreneurship also has an impact on the context.

To understand the phenomenon of entrepreneurship in post-conflict countries, one needs to consider both the entrepreneurial process and the entrepreneurial context. The two elements work together in shaping entrepreneurship in post-conflict countries. The particular context of post-conflict countries provides opportunities for entrepreneurship but also sets boundaries and creates specific challenges. Yet, the relationship is bidirectional. The outcome of the entrepreneurial process also has an influence on the context and impacts the situation of post-conflict countries through economic recovery and peacebuilding.

Combining these different foundational concepts, our literature review is guided by the following research questions: (1) How does the specific post-conflict context (where and when) affect the entrepreneurial process (who, why and how)? (2) What impact does entrepreneurship (or the outcome of the entrepreneurial process) have on post-conflict countries?

3 Literature search and study selection

To identify the relevant literature, we used a systematic approach following three steps. First, we determined the appropriate search keywords. Second, we identified all relevant papers, and third, we analyzed and structured the studies that we identified (Tranfield et al. 2003).

Based on recommendations by Clark et al. (2020) and Fisch and Block (2018), we used academic research databases, such as ‘Web of Science’, ‘JSTOR’, and ‘Google Scholar’, to identify studies investigating entrepreneurship in post-conflict countries. Subsequently, we searched journal publisher databases (Emerald, Taylor & Francis, SAGE, Springer, Elsevier, Wiley) for further publications.

The topic of entrepreneurship in post-conflict countries involves two terms: entrepreneurship and post-conflict. To ensure the inclusion of both terms and the related keywords in our search, we used two search strings. While the first string included all possible entrepreneurship- and small-business-related keywords,Footnote 2 the second string included all post-conflict-related keywords.Footnote 3 Figure 1 depicts our methodological approach step by step to provide transparency and enable replicability (Kraus et al. 2020).

Fig. 1
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PRISMA chart

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Initially, our title and abstract search identified 698 studies (step 1). To identify the studies relevant for our review, we first removed duplicates (step 2) and focused only on studies in the subject areas of entrepreneurship and (small) business creation and excluded studies about established firms. At the second evaluation stage, we excluded book chapters, reports and conference papers due to their inconsistent and nontransparent peer review process. We also limited our review to English language journals (Tranfield et al. 2003). At this point, 345 articles remained (step 3). We read all abstracts (step 4) and decided to exclude another 57 articles focusing on governance and business conflict management, leaving 288 articles for the full text-based screening (step 5). After reading the papers, we excluded additional articles focusing on the pre-conflict and conflict period (113 articles) and papers that were not directly connected to entrepreneurship (23 articles), resulting in a sample of 152 articles (step 6).

To ensure a high quality of the articles in our review, we finally excluded all articles published in journals without an impact factor. After this final step, 71 articles remained in our sample (step 7). These studies were published between 2001 and 2022.

We categorized the 71 studies according to the dimensions when and where (with the sub-dimension ‘business’, ‘social’, ‘spatial’ and ‘institutional’ identified by Welter (2011) and described in Chapter 2), who and why, how and impact. While all three authors of this paper were involved in the development of the coding scheme, two of the three authors conducted the final classification of studies. One author provided the initial proposal for classifying the papers, while the second author double-checked this classification. In addition, an experienced researcher who was not involved as an author independently classified all papers into the different categories. We discussed coding differences and adapted the allocation of the respective studies accordingly.

4 Descriptive analysis of the identified literature

4.1 Publications by year

Prior to 2001, no studies that met our research criteria could be identified. Between 2001 and 2011, the number of published articles did not exceed two articles per year. Since then, the research output has reached its peak with 11 published articles in 2018. There are two possible reasons for this development. First, the importance of entrepreneurship in post-conflict countries has gained increasing recognition among politicians and academics. Second, the number of conflicts in the world has grown, especially after the Arab Spring in the Middle East starting in 2011. The number of studies decreased after 2018, which can be explained by the end of many conflicts, especially in the Middle East. It remains to be seen how publication activity will develop in the future given the current conflicts and wars.

4.2 Publication activity by geographical location of conflict

In terms of regional coverage, with 15 publications,Footnote 4 Kosovo, Bosnia and Herzegovina and Uganda were the most researched regional contexts for entrepreneurship in post-conflict countries, followed by Rwanda (n = 6) and Sri Lanka (n = 6). Overall, with 28 publications, Europe was the most researched continent in our sample, followed by Africa (n = 26), Asia (n = 17), and the Americas (n = 1). Two articles did not have a specific geographical focus.

4.3 Publication activity by discipline and journal

The 71 articles in our sample were published in 47 journals from different disciplines, such as entrepreneurship, economics, development studies, management and organization, public policy, conflict studies, and sociology. The distribution of articles across a wide range of journals and disciplines highlights the broad interest in the topic. Nevertheless, 41 studies in 20 journals can be attributed to the field of entrepreneurship and small businesses. In the area of economics, ten journals with 12 studies are included in our sample. In total, 25 studies are in the area of development studies, public policy and conflict studies. This also emphasizes the high political interest in the phenomenon. In total, the eight main contributing journals (> two publications each) published approximately 40% of our sample. It is noteworthy that we identified many journals from different research areas with only a few publications each underlining the fragmented nature of the research field.

4.4 Theories, concepts and bodies of literature used

The range of theories or concepts to explain the phenomenon of entrepreneurship in post-conflict contexts is broad. Explicit references to specific theories are rare. Those studies that do mention theories use institutional theory (n = 9), social capital theory (n = 2), human capital theory (n = 1), the resource-based view (n = 1) and different theories of firm growth (n = 1). However, most studies do not make use an explicit theory but draw on prior research from different bodies of literature. In this context, concepts and frameworks from the entrepreneurship literature such as the determinants of entrepreneurship (and their relation to firm performance) (n = 5), female entrepreneurship (n = 5), entrepreneurial networks (n = 5) and entrepreneurial intentions (n = 2) are applied. Furthermore, the studies draw on different concepts from the strategic management and sociological literature. Moreover, another important research stream is the research on the importance of the private sector and trade for peacebuilding. Overall, the literature on entrepreneurship in post-conflict countries is fragmented with regard to its theory or literature base, and thus far, no dominant theoretical concept or perspective has emerged.

4.5 Methods used

Twenty-eight studies in our sample are of a qualitative-empirical nature, whereas 41 studies are quantitative-empirical (two are conceptual). The most widely used research methods are surveys (n = 32), case studies (n = 15) and interview-based studies (n = 12). A smaller number of studies use mixed-method approaches, typically combining interviews with surveys or case studies (n = 10).

5 Findings of the literature review

To answer our two research questions, we draw on the prior research described in Chapter 2 and classify the literature on entrepreneurship in post-conflict countries into the four categories representing different research streams: when and where, who and why, how and the impact of entrepreneurship in post-conflict countries.Footnote 5 To better understand the context dimension, we sub-divided the category when and where according to the sub-dimensions identified by Welter (2011), namely business, social, spatial and institutional dimension.

In the first category, the studies investigate when and where entrepreneurial activities happen in post-conflict countries (27 studies, 38%). Regarding the sub-categories, we find that the main research focus in our study sample is on the institutional context and focuses on the influence of formal and informal institutions on entrepreneurship in post-conflict environments (19 studies, 70.4% of this dimension). We were only able to identify two studies investigating the business and spatial context. Nine papers investigate the social context. While the studies in the second category investigate who is involved in entrepreneurship and why (27 studies, 38%), the studies in the third category examine how the entrepreneurial process unfolds (26 studies, 36.6%). Category 4 focuses on the impact of entrepreneurship on the post-conflict context (21 studies, 29.6%).

In the following, we will summarize the main content of the studies in the four categories to provide a context-specific understanding of entrepreneurship in post-conflict countries.

5.1 Category 1: the effect of the post-conflict context on entrepreneurial opportunities, the individuals involved and the entrepreneurial process (when and where)

The studies in the when and where categories investigate how the post-conflict context affects the creation and emergence of entrepreneurial opportunities, the individuals engaging in entrepreneurial activities, and the entrepreneurial process.

5.1.1 When

The when dimension of entrepreneurship in a post-conflict environment refers to the temporal dimension (“when” after the conflict). Even though we were unable to find studies that focus solely on this dimension, Desai (2011) highlights that an entrepreneur’s potential is influenced by the historical and institutional context and is thus particularly important during periods of change. Furthermore, Cheung (2016) emphasizes that in times of conflict, ventures in search of new knowledge are geographically and technologically restricted. In contrast, during peace, the extent to which an organization engages in exploratory learning depends mainly on the organization itself (Cheung 2016). Hence, both studies argue that the specific time context in these environments enables or disables entrepreneurial activities during and after the conflict.

5.1.2 Where

The where category introduced by Welter (2011) refers to the business, social, spatial, and institutional context and how these dimensions affect entrepreneurship. Among the identified studies, only two emphasized the impact of the industry or business context on entrepreneurship. Palalić et al. (2017) find that not only individual factors but also the specific post-conflict business environment affects the entrepreneurial intentions of university students in Bosnia and Herzegovina. The results of this study indicate that demotivation with the current business environment lead to weaker entrepreneurial intentions of students. In addition, Demirgüc-Kunt et al. (2011) find that business sector employment affects the entry into and viability of self-employment.Footnote 6 More specifically, the authors conclude that people working in the informal sector are more likely to engage in viable self-employment.

In addition, we were able to identify two studies that investigate the influence of the spatial dimension on entrepreneurship. Both studies investigate how regional employment and urban location affect entrepreneurship (Krasniqi 2014; Rooks et al. 2012). Whereas Krasniqi (2014) finds that regional employment and urban location positively affect the likelihood of being an entrepreneur, Rooks et al. (2012) highlight an inverse U-shaped relationship between networks and innovation performance, but only for urban entrepreneurs.

Nine studies focus on the social context of entrepreneurship. This relatively small number of studies is surprising as previous studies have highlighted that social aspects are an important driver for entrepreneurial decision-making (Shepherd et al. 2015). Studies investigating the social context have found that cultural background and ethnic diversity are important drivers of entrepreneurship in a post-conflict environment (Efendic et al. 2015; Langevang and Namatovu 2019; Nnadozie 2002; Surangi 2018). More specifically, gender stereotypes and societal expectations seem to determine how the entrepreneurial process unfolds (Guma 2015; Santamaria-Alvarez et al. 2018). Furthermore, institutional voids are filled with informal ties and social networks (Santamaria-Alvarez et al. 2018; Williams et al. 2022), particularly in the case of transnational (Santamaria-Alvarez et al. 2018) and returnee entrepreneurs (Williams et al. 2022).

Most studies investigating the where dimension focus on the institutional context (70.4%). They find that formal (e.g., political and economic systems, rule of law) and informal institutions (e.g., norms, values, attitudes) both have the potential for encouraging and discouraging entrepreneurial activity after conflicts (Ateljevic et al. 2004; Capelleras and Hoxha 2010; Daka and Siad 2021; Desai 2011; Desai et al. 2013; Dijp 2014; Williams 2019; Williams and Vorley 2017).

Formal institutions often cause bureaucratic hurdles that can discourage entrepreneurship (Daka and Siad 2021; Williams and Vorley 2017). However, in the absence of strong formal institutions, informal barriers emerge that inhibit entrepreneurial activity (Capelleras and Hoxha 2010). Hence, institutional reforms and the establishment of trust in institutions present a necessary precondition to encourage entrepreneurship and motivate people to establish new businesses in post-conflict countries (Efendic et al. 2015; Krasniqi and Williams 2019; Lajqi and Krasniqi 2017; Williams 2019; Williams and Efendic 2019). However, it should be considered that in these countries, informal institutional change occurs at a slower pace than formal institutional reforms and/or developments, which can happen relatively quickly (Williams and Vorley 2017). Furthermore, in post-conflict environments, venture growth depends on the institutional environment (Krasniqi and Mustafa 2016). The absence of rule of law within the immediate post-war period often creates major informal constraints that limit firm growth (Capelleras and Hoxha 2010; Krasniqi 2007; Krasniqi and Branch 2018).

In addition to the general constraints on entrepreneurship and firm growth induced by formal and informal institutions, entrepreneurship is also affected by sociopolitical, legal and economic factors (Djip 2014; Ishengoma and Kappel 2011; Krasniqi 2007). In particular, the financing environment plays a crucial role in supporting or hindering entrepreneurial activity and growth (Ateljevic et al. 2004; Ishengoma and Kappel 2011; Krasniqi 2007). Prior research highlights the importance of establishing constructive policy frameworks (Ateljevic et al. 2004) and a fitting institutional environment (Hisrich et al. 2016) to overcome financial limitations due to disrupted banking systems and a lack of private investors (Hisrich et al. 2016).

Overall, the studies concerned with the where dimension illustrate that the future of entrepreneurship in post-conflict countries depends on maintaining and building complementarity among formal and informal institutions (Williams and Vorley 2017), providing coordinated and well-defined political support (Gamlen 2014; Williams 2018), and increasing institutional quality and trust (Desai 2011; Williams 2019).

5.2 Category 2: the individuals who engage in entrepreneurship (who and why)

Studies in this category focus on who engages in entrepreneurial activities in post-conflict countries and why they do so.

Post-conflict countries must often deal with high rates of unemployment and the loss of educated young people due to migration (Palalić et al. 2017). However, young and well-educated people are particularly important for economic stability and growth (Palalić et al. 2017). One way to address this challenge is to motivate young people to become entrepreneurs. That is why many post-conflict countries offer university programs to educate (potential) entrepreneurs and provide them with the required knowledge and skills to start a business (Gavigan et al. 2020; Palalić et al. 2017). In this regard, previous research has found that such pre-entrepreneurial training draws significantly more interest from male than from female students (Mawanga 2017; Palalić et al. 2017) and from those with prior entrepreneurial experience (Palalić et al. 2017). Accordingly, in post-conflict countries, male entrepreneurship appears to be more common than female entrepreneurship (Agyire-Tettey et al. 2018). This can be explained by existing gender stereotypes, which often result in a lack of support for female entrepreneurs (Guma 2015). Nevertheless, female entrepreneurs are attracting attention and have become increasingly important in post-conflict countries (Bardasi et al. 2011; Guma 2015; Ramadani et al. 2015). Women are often motivated to engage in entrepreneurial activities out of necessity (Bardasi et al. 2011). They frequently become the main supporters of their family because their husbands and other male relatives were killed or seriously injured during the war. Hence, entrepreneurship is a way for women to care for their children and families (Karki and Xheneti 2018) and to improve their economic situation (Xheneti et al. 2019). In addition, it has been found that women seem to be more likely to engage in entrepreneurial activity when they receive entrepreneurial education and training (Gavigan et al. 2020). In addition, some studies have highlighted that training (de Mel et al. 2014; Gavigan et al. 2020)—especially when combined with financial support (de Mel et al. 2014)—enhances the chances of female entrepreneurs setting up a venture. Furthermore, women typically tend to run smaller ventures than men (Bardasi et al. 2011; Ramadani et al. 2015), have a good education (Ramadani et al. 2015) and are middle-aged (Guma 2015).

Overall, it can be noted that education affects a person’s managerial skills and consequently influences their propensity for entrepreneurship (Krasniqi 2014). However, as education also enables a person to enter well-paid jobs outside the field of entrepreneurship, it might also diminish the likelihood of a person starting their own business (Krasniqi 2014). There is evidence for both lines of arguments. Whereas Gavigan et al. (2020) found that educated people are more likely to become entrepreneurs and that graduates are often pushed into entrepreneurship (Muhammad et al. 2011), Chowdhury (2011) emphasized that higher educated people prefer working for others instead of starting their own business in post-conflict countries.

Prior studies argue that many individuals who left their country due to conflict are eager to return to their home countries after the war and utilize their knowledge to explore emerging business opportunities and set up their own businesses (“diaspora entrepreneurs”) (Dahles 2013; Graham 2014). Whereas Santamaria-Alvarez et al. (2018) demonstrated that diaspora entrepreneurs are mainly driven by financial incentives, other studies highlight that they are also driven by their emotional connection to their home countries and their desire for social status (Williams and Efendic 2019). In contrast, Williams (2019) argues that second-generation diaspora entrepreneurs have fewer emotional ties to their home country, which makes emotional motives less important. Overall, diaspora entrepreneurs have been found to play a crucial role in rebuilding their home countries and act as drivers of change, which helps to rebuild economies after conflict (Dahles 2013; Graham 2014; Williams 2018; Williams and Efendic 2019). In this regard, it has been argued that more effective, coordinated policy initiatives in post-conflict countries are required to increase diaspora entrepreneurs’ trust in their home country institutions (Krasniqi and Williams 2019), to reduce business and environmental barriers (Mohamed et al. 2021) and to harness the potential of diaspora investments and entrepreneurship (Williams 2018).

In summary, the studies investigating the who and why dimensions highlight the necessity for post-conflict countries to motivate young people to become entrepreneurs by establishing targeted education programs (e.g., Fernando and Nishantha 2019; Gavigan et al. 2020; Palalić et al. 2017). Moreover, it seems crucial to reduce gender stereotypes in these societies (e.g., de Mel et al. 2014; Gavigan et al. 2020; Ramadani et al. 2015). Furthermore, it has been shown that entrepreneurship is often chosen out of necessity to generate income and survive (Krasniqi 2014; Muhammad et al. 2011; Williams and Vorley 2017). Diaspora entrepreneurs, by contrast, return to their home countries to exploit opportunities and are motivated by emotional and financial incentives to contribute to the development of their home country (Dahles 2013; Santamaria-Alvarez et al. 2018; Williams 2018; Williams and Efendic 2019).

5.3 Category 3: the entrepreneurial process in post-conflict countries (how)

The how category focuses on the entrepreneurial process itself, including opportunity recognition, exploitation, and execution (Shane 2003).

While only a small number of studies focus on the emergence or creation of opportunities and how they are discovered and evaluated (Cheung 2016; Masika 2017), the majority of studies in this category investigate how entrepreneurial opportunities are exploited and executed. Here, the main focus is on resource acquisition in post-conflict countries (Bardasi et al. 2011; Bongomin et al. 2018, 2020; Bruhn and Zia 2013; Mutandwa et al. 2015) as well as on the drivers of venture performance and growth (Capelleras and Hoxha 2010; Djip 2014; Dawa and Namatovu 2015; Efendic et al. 2015; Premaratne 2001).

The recognition and exploitation of entrepreneurial opportunities is generally motivated by the social network, social learning (Lajqi and Krasniqi 2017), and access to training opportunities (Lajqi and Krasniqi 2017). In addition, exploitative learning (Cheung 2016), social conventions, and gender stereotypes (Guma 2015) as well as family background (Eijdenberg et al. 2015) are found to be important in identifying and seizing entrepreneurial opportunities. These aspects affect not only the setup of new ventures but also their growth (Cheung 2016; Dawa and Namatovu 2015; Lajqi and Krasniqi 2017; Palalić et al. 2017).

In addition, access to the required resources, and in particular access to capital, is a decisive factor in post-conflict contexts to enable venture growthFootnote 7 (Bongomin et al. 2018; Fiala 2018; Krasniqi 2010) and survival (Bongomin et al. 2018, 2020; Demirgüc-Kunt et al. 2011). In addition to financing constraints due to the disrupted banking system, the missing customer relationships and difficulties in evaluating customer reliability combined with the high risk and often lack of collateral of new ventures amplify the financial constraints of new ventures (Krasniqi 2010). Furthermore, Bongomin et al. (2020) highlight that access to capital presents a particular challenge for female entrepreneurs. Even though the emergence of microfinance has improved the access to financial means for women (Bongomin et al. 2020), the money provided is often used to cover the financial commitments of their families rather than to fund entrepreneurial endeavors (Stavrevska 2018). In contrast, Bardasi et al. (2011) found no gender discrimination even though female entrepreneurs received smaller loans than their male counterparts.

Furthermore, the literature notes that entrepreneurs in post-conflict countries often lack the necessary management skills to establish and grow their businesses (Mutandwa et al. 2015). To set up a venture and generate growth, entrepreneurs not only require a broad range of skills and knowledge, but they also need experience (Mutandwa et al. 2015; Sachitra and Chong 2018). Although this does not apply solely to post-conflict countries, entrepreneurs in these countries often have particular disadvantages in this regard. As it is difficult for a single entrepreneur to possess a complete skill set, the composition of the entrepreneurial team can have a significant effect on the growth of a venture (Krasniqi et al. 2008). Consequently, specific entrepreneurship training is necessary to counter the deficiencies of the educational system (Lajqi and Krasniqi 2017). However, the findings evaluating the effect(s) of entrepreneurial education have been ambivalent. Whereas some studies have found that entrepreneurship training increases the growth potential of ventures (Bruhn and Zia 2013; Capelleras and Hoxha 2010), the study of Fiala (2018) shows that the impact of training (and capital) on firm performance depends on entrepreneurs’ gender.

Furthermore, in a weak institutional context, which is typical for post-conflict environments, the separation of ownership and management seems to have a particularly negative effect on business growth aspirations; hired managers appear to have a lower interest in growth than owner-managers (Efendic et al. 2015).

To conclude, the research examining the how dimension primarily focuses on the execution phase and thereby emphasizes the importance of resource acquisitions (Bardasi et al. 2011; Bongomin et al. 2018). These studies investigate in particular how to overcome financing constraints (Bongomin et al. 2018; Fiala 2018; Krasniqi 2007, 2010) and how to improve entrepreneurial and management skills to enable venture growth (Mutandwa et al. 2015; Sachitra and Chong 2018).

5.4 Category 4: the impact of entrepreneurship on the post-conflict context (impact)

The previous three categories focus on the influence of context on entrepreneurship in post-conflict countries using a top-down approach (Welter 2011). However, the relationship between entrepreneurship and context is bidirectional, and entrepreneurship may also affect context through a bottom-up process (Welter 2011). We identified a number of studies investigating how entrepreneurship affects the environment of post-conflict countries. More specifically, these studies predominantly examine the impact of entrepreneurship on economic recovery and peacebuilding and how it retroactively affects the individuals involved in entrepreneurship, the entrepreneurial process and the environment.

5.4.1 Economic recovery

A characteristic of post-conflict countries is that they are typically in an overall fragile state with weak rules of law and, often, a lack of institutions (Abramov 2009). Furthermore, such countries tend to struggle with resources, widespread poverty (Langevang and Namatovu 2019; Sserwanga et al. 2014) and many other challenges affecting their aspiration to recover from conflict (Sserwanga et al. 2014). There is a broad consensus among researchers that entrepreneurial activities can play a crucial role in supporting economic recovery in this particular environment (Boudreaux 2007; Bray 2009; Kusago 2005; Matul and Tsilikounas 2004; Tobias et al. 2013).

In the case of East Africa, entrepreneurial activities in Rwanda had a positive impact on the social exchange between former conflict parties, enhancing economic conditions and reducing poverty (Langevang and Namatovu 2019; Sserwanga et al. 2014; Tobias and Boudreaux 2011). In Uganda, social entrepreneurs were able to gather the required resources to solve social problems, help society, and achieve post-conflict recovery (Langevang and Namatovu 2019; Sserwanga et al. 2014). Moreover, they were promoters of change and solved many challenges that had been unaddressed by the government (Sserwanga et al. 2014). Boudreaux (2007) argues that the commercial activities of profit-oriented and hybrid organizations that combine social with economic aims (Kolk and Lenfant 2016) are a valuable path to reconciliation in post-conflict countries, as they promote cooperation between different parties including former enemies (Kopren and Westlund 2021). This can create prosperity as well as peace in such societies (Bray 2009; Tobias et al. 2013).

5.4.2 Peacebuilding

Entrepreneurial activities can also play a decisive role in supporting peacebuilding efforts in post-conflict areas (Boudreaux 2007; Tobias et al. 2013; Tobias and Boudreaux 2011; Yoosuf and Premaratne 2017). By promoting exchange between former conflict parties and building social capital across ethnic lines (Kopren and Westlund 2021), entrepreneurship can reduce conflicts and encourage peace (Boudreaux 2007; Tobias et al. 2013). Rettberg (2016) argues that the three main factors that allow businesses to be involved in peacebuilding efforts are business needs (need), social change (creed), and profitability motivations (greed).

In addition to the direct effects of entrepreneurship on peacebuilding, previous studies provide the first indications that entrepreneurship can also lead to cultural change in such societies. Particularly with regard to female entrepreneurship, some authors highlight that female entrepreneurial activities can have a positive effect on their social position not only within the family but also within the community in which they are embedded, which may initiate a redefinition of the role of women in society (Karki and Xheneti 2018; Xheneti et al. 2019).

To summarize, studies investigating the impact dimension have observed that entrepreneurship plays a crucial role in revitalizing the economy, resolving social challenges, supporting peacebuilding, and initiating cultural change (e.g., Boudreaux 2007; Bray 2009; Djip 2014; Kusago 2005; Tobias et al. 2013).

6 Discussion

6.1 Summary and integrative conceptual model

The aim of our literature review was to understand how the post-conflict context affects the entrepreneurial process and what impact entrepreneurship has on the development of post-conflict countries. We categorized the 71 studies identified according to their main topics into four categories, specifically when and where entrepreneurship happens, who and why individuals become involved in entrepreneurship and how the entrepreneurial process unfolds. Furthermore, we investigated the impact of entrepreneurship on the development of post-conflict countries in terms of economic recovery and peacebuilding.

Based on our findings summarized in the previous chapter, we develop an integrative conceptual model (Fig. 2). The model integrates the process model developed by Shane (2003), the context view of Welter (2011) and our findings about entrepreneurship in a post-conflict environment. Our literature review highlights that the post-conflict context influences not only the process of entrepreneurship (arrow A3) but also the emergence and creation of opportunities (arrow A1). Furthermore, the post-conflict context has a direct effect on the characteristics and attributes of the individuals engaging in entrepreneurship (arrow A2). As expected, our review highlights that the who and why dimensions cannot be considered separately but should be combined into one dimension and that the reasons of why people engage in entrepreneurship directly affects the entrepreneurial process (how) (arrow B1). In addition, we find that the literature investigating the who and why dimension discuss in what way people act which also affects how opportunities are discovered, evaluated and exploited (arrow B2). Looking more closely at the entrepreneurial process (how), entrepreneurial opportunities must be discovered and evaluated (arrow C1) as well as exploited and executed (arrow C2). Finally, the entrepreneurial process affects the post-conflict environment (arrow D1). In line with Welter and Baker (2020), we find evidence that the interplay of entrepreneurship and context is not unilateral but bidirectional. Hence, there is a feedback loop, and the impact dimension affects the when and where of entrepreneurship (arrow D4) as well as the individuals involved (arrow D2) and the entrepreneurial process (arrow D3).

Fig. 2
figure 2

Conceptual model

Full size image

In Appendix 1, we assign the 71 studies of our literature review to the different conceptual categories (A1–D3) and describe briefly their main focus, approach used and key findings.

6.2 Implications for theory and practice

We contribute to prior research on entrepreneurship in post-conflict countries and highlight that the literature investigating this topic is fragmented, multi- and interdisciplinary and lacks a coherent theoretical framework. Aldairany et al. (2018), who provided a systematic review of 57 articles of entrepreneurship in a conflict context, did not distinguish between conflict and post-conflict contexts. However, this differentiation is necessary as post-conflict countries are already on their way to re-establishing their economies and regaining stability; therefore, the conditions for entrepreneurship in such countries differ substantially from those of conflict countries.

To this end, we developed a contextualized conceptual model combining Shane’s (2003) entrepreneurial process model with Welter’s (2011) context lens and categorized the identified literature into four categories. Our study contributes to prior research by highlighting how these different categories are interrelated and affect each other. Furthermore, we confirm that the influence of context in entrepreneurship is not uni- but bidirectional, meaning that the context influences the process of entrepreneurship and vice versa (Welter and Baker 2020).

In addition, our review contributes to the call for management research to help tackle the grand challenges of our society (George et al. 2016). We show how and when entrepreneurship can be an actionable approach that can support post-conflict countries in achieving economic recovery and peace. This allows us to derive some practical implications of our study for (national and international) policy-makers. Our study can help them in the design and implementation of tailor-made programs and initiatives supporting entrepreneurship in post-conflict countries. For example, introducing appropriate entrepreneurial education programs can help motivate young people to actively search for and exploit entrepreneurial opportunities. As a result, the migration tendencies of young, well-educated people might be reduced, and their motivation to support the rebuilding of their countries might increase. Another option would be to implement programs by national and international organizations (Garriga and Phillips 2014; World Bank 2013) providing appropriate financial and other types of support for young companies. However, certain conditions should be attached to such programs so that the funds are used in the intended manner rather than for other purposes. Finally, policy makers could try to actively engage diaspora entrepreneurs in the process of economic recovery. Our review shows that diaspora entrepreneurs of the first generation still have a strong emotional connection to their home country. They can provide both financial and managerial resources to stimulate entrepreneurship in a post-conflict country (Santamaria-Alvarez et al. 2018; Williams and Efendic 2019).

6.3 Limitations

As with any study, our findings should be interpreted in the light of several limitations. First, even though a systematic literature review provides an in-depth perspective on the current state of knowledge on a specific topic, its comprehensiveness is restricted by the keywords and search strings used. Second, we excluded book chapters and working papers and focused on peer-reviewed articles. To ensure a high quality of the articles in our review, we excluded all studies published in journals without an impact factor. Third, we only included articles published in English. Furthermore, as with any literature review, our results are limited to the evidence provided by the prior studies. In the context of entrepreneurship in post-conflict countries, this constraint is particularly important as many works in this area are based on interviews and case studies or focus on single countries. Thus, causal evidence of the (reciprocal) effects of entrepreneurship in the context of post-conflict countries is rather scarce, which limits the generalizability of our results. Additionally, it is important to recognize that the development of post-conflict situations is influenced by multiple factors such as the causes, duration, and scale of the conflict (Junne and Verkoren 2005). Entrepreneurship is only a small piece of the puzzle of explaining the development of post-conflict countries.

6.4 Future research

Several avenues for future research exist in the four categories structuring our literature review.

6.4.1 Effect of the post-conflict context on the institutional environment (when and where)

Our review highlights that a lack of entrepreneurial tradition and an often weak institutional context present an unfriendly environment for the exploration and exploitation of entrepreneurial opportunities in post-conflict countries. To overcome these hurdles, the establishment of strong institutions combined with governmental programs in the form of financial and nonfinancial support has proven to be important (e.g., entrepreneurial education programs, effective measures against corruption, financial support). Future research should investigate under which circumstances national governments are able to overcome these hurdles on their own and when international support by other countries or multinational institutions is needed. Whereas national governments can be affected by corruption and a lack of trust and can therefore become ineffective in enforcing change (Abramov 2009), international support can provide a positive signal (Garriga and Phillips 2014); however, it can also be costly and time-consuming (Boudreaux 2007). Hence, more research is required to better understand how national and international programs can be mutually supportive to establish an entrepreneurship-friendly environment in post-conflict countries.

Furthermore, thus far, we lack information about which exact types of formal institutions create impactful conditions to support entrepreneurship in post-conflict contexts. More specifically, questions about the role of democracy, taxes, trade barriers and rules stimulating investments by new and established entrepreneurs need to be answered. The same is true for the role of informal institutions and their effect on entrepreneurship. Hence, future research should investigate how informal norms and conventions such as religion or culture in these countries affect entrepreneurial activity and how these conventions must change to foster entrepreneurship in post-conflict countries. More specifically, our review highlights that entrepreneurship can lead to social change, particularly by means of female empowerment through entrepreneurship (Bardasi et al. 2011; Guma 2015; Ramadani et al. 2015). However, due to particular cultural constructs and the associated gender stereotypes (Guma 2015), the overall number of female entrepreneurs still remains low. Hence, future research could investigate how to overcome these challenges and motivate more women to become entrepreneurs, not only out of necessity (Bardasi et al. 2011) but also because they actively search for and exploit commercial opportunities.

6.4.2 Effect of the post-conflict context on individuals engaging in entrepreneurship (who and why)

Our review shows that entrepreneurship in post-conflict countries is often chosen out of necessity instead of the desire to exploit opportunities (Krasniqi 2014; Tarway-Twalla 2011). Whereas prior research argues that entrepreneurship has a positive effect on economic recovery (e.g., Berdal and Mousavizadeh 2010; Bozzoli et al. 2013), so far, no distinction has been made regarding whether this is true for both opportunity and necessity entrepreneurs (Block and Koellinger 2009). Future research should make this distinction and investigate if and under which conditions entrepreneurship has a positive impact in the context of post-conflict countries. For the forms and types of entrepreneurship for which this is not the case, it might be a more reasonable policy to support individuals in finding wage-earning jobs (Krasniqi 2014).

Our literature review also highlights that the share of necessity entrepreneurs is lower in the case of diaspora entrepreneurs. These entrepreneurs actively search for opportunities and are motivated by emotional and financial incentives to contribute to the development of their home country (Santamaria-Alvarez et al. 2018; Williams and Efendic 2019). Some post-conflict countries actively seek to attract diaspora entrepreneurs to return to their home countries (Krasniqi and Williams 2019). This can be explained by the acquired entrepreneurial knowledge and skill sets of these individuals (Dahles 2013; Krasniqi and Williams 2019; Mohamed et al. 2021) as well as their existing international network, which enables them to attract foreign investors (Williams and Efendic 2019). However, the question remains: when and under which conditions do diaspora entrepreneurs return to their home countries and engage in entrepreneurship (Kenney et al. 2013)? More specifically, are diaspora entrepreneurs the drivers of economic development very early in the process, or do they return to their home countries after the ecosystem and trust in the institutions has already been established (Kenney et al. 2013; Krasniqi and Williams 2019)? Answering these questions is crucial as policy measures might differ significantly depending on whether they are aimed at supporting the return of diaspora entrepreneurs or at first supporting local actors to establish a functioning business ecosystem (e.g., tax exemptions for a certain period, lease of buildings and lands for symbolic amounts), which will then attract diaspora citizens to return home. Hence, simply trying to find measures on how to attract people to return to their home countries and engage in entrepreneurship might not be sufficient (Williams 2018). Hence, future research should first investigate at which stage diaspora entrepreneurs are likely to return to their post-conflict home country and, second, which support mechanisms are required to establish a functioning ecosystem to enable economic development.

In addition, post-conflict countries deal with high unemployment rates and a loss of educated young people due to migration. However, well-educated people are an important resource for establishing economic stability and growth (Palalić et al. 2017). As a result, post-conflict countries aim to counteract this development by establishing entrepreneurial education programs to motivate these people to actively search for and exploit entrepreneurial opportunities in their countries of origin. However, to date, relatively little is known about the factors that motivate individuals in post-conflict countries to pursue entrepreneurship (Rapp and Olbrich 2021). Thus, we propose that future research should use more experimental studies to examine the entrepreneurial motivation of different types of entrepreneurs in post-conflict countries. Answering this question would provide more insights into how governmental interventions can help foster entrepreneurship in such countries.

6.4.3 Entrepreneurial process in post-conflict countries (how)

Our review highlights that most studies investigating the entrepreneurial process focus on the execution phase, and only a few studies consider the opportunity, discovery, and exploitation phases (Cheung 2016). Thus, little is known about the types of entrepreneurial opportunities in a post-conflict environment (de Jong and Marsili 2015) and by whom and how they are discovered and exploited. More specifically, it is unclear whether these opportunities emerge out of the specific post-conflict context or if they are created by the people engaging in entrepreneurship (Alvarez and Barney 2007). Furthermore, our research highlights that little is known about the cognitive processes needed for the discovery and evaluation of opportunities in post-conflict environments. Answering these questions is important to be able to understand how the entrepreneurial process in post-conflict countries unfolds and how it can be supported by governmental activities such as introducing business incubation initiatives (Jibrin et al. 2013).

When investigating the execution phase, the prior research mainly focuses on the acquisition of resources and the drivers of venture growth (Bongomin et al. 2020; Demirgüc-Kunt et al. 2011; Efendic et al. 2015; Krasniqi and Mustafa 2016). According to our review, entrepreneurs in post-conflict countries face particular challenges in accessing capital that influence the success of their ventures. Post-conflict countries typically have disrupted banking systems and lack financing alternatives. Furthermore, financial institutions are often reluctant to offer loans to new and small ventures due to their high risks, which cannot be reduced by providing collateral or other types of security to the bank (Krasniqi 2010). Although it has been argued that venture capital funds could help counteract these deficiencies (Biekpe 2004; Hisrich et al. 2016), a weak institutional environment acts as a deterrent for venture capital firms to engage in these countries. Thus, other forms of entrepreneurial finance—at least in the short term—might be more appropriate to reduce financing constraints in post-conflict environments. Such financing instruments or alternatives include crowdfunding and business angels. However, thus far, little is known about which financing types and instruments are appropriate for entrepreneurs in the specific context of post-conflict countries.

Furthermore, our review highlights that entrepreneurs in post-conflict countries often lack managerial skills to establish and grow their business. Prior studies have argued that specific entrepreneurship and management training programs are required to counter these deficiencies and to promote entrepreneurs with high growth ambitions (Lajqi and Krasniqi 2017; Mamman et al. 2006). However, the effects of these programs on entrepreneurship and venture growth are not yet well understood (Bruhn and Zia 2013; Capelleras and Hoxha 2010; Krasniqi and Mustafa 2016). Therefore, more research is needed to comprehend the impact of educational programs on establishing and growing ventures in a post-conflict context and how these programs should be adapted to different forms of entrepreneurship. In particular, we lack quantitative (experimental) studies with research designs that allow us to identify the causal effects through which educational programs truly create value.

6.4.4 Impact of entrepreneurship on the post-conflict context and vice versa (impact)

Our review emphasizes the positive effect of entrepreneurship on economic recovery and peacebuilding after a conflict (Boudreaux 2007; Williams and Efendic 2019). This effect is mainly attributed to the creation of job opportunities but also to the positive effect of entrepreneurs’ solutions to societal challenges that governments are unable to address.

However, prior research also shows that entrepreneurial activity with the aim of taking advantage of the difficult situation of a country for personal gain can also destabilize the system and may have destructive effects on the rebuilding efforts (Baumol 1990; Subedi 2013). Currently, there is little research about this type of destructive entrepreneurship and its negative effects on economic recovery (Desai 2011; Desai et al. 2013). In this context, it is necessary for people, including entrepreneurs, to understand the conflict and its positive and negative effects but also to acknowledge the importance of peace and its benefits (Hilali 2002; Yadav 2021). Hence, broader education programs could help potential entrepreneurs better understand the opportunities and benefits that might result from a conflict and those that might result from a stable environment after the conflict. Further research could use experiments to investigate such programs more closely and provide ideas of how they should be designed, whom they should address and how they can help people to understand the benefits to the country as well as to themselves.

Furthermore, prior research has predominantly focused on the role of commercial and trade activities of entrepreneurs and illustrated a positive relationship between economic recovery and peacebuilding efforts (Boudreaux 2007). As a result, these types of activities have received governmental support. However, the influence of other sectors, such as construction and agriculture, on reconciliation efforts has been neglected so far. Consequently, we suggest that further studies investigate the role of entrepreneurs in different sectors to understand their influence on the economic development and growth of a country. This could provide insights into whether it is recommendable to support those sectors to achieve long-lasting positive developments in post-conflict countries.

Finally, only little research explicitly examines the reciprocal effect between the entrepreneurial process and the post-conflict context. Welter (2011) suggests that context should be investigated using not only a top-down but also a bottom-up approach. Hence, future research could conduct surveys or archival data studies to provide more insights into how entrepreneurship shapes the post-conflict context (Welter and Baker 2020) and how these changes then affect the development of entrepreneurial opportunities, their exploitation and execution.

7 Conclusion

Exploring how entrepreneurship can help to improve the situation of post-conflict countries in the world is important. Our literature review summarizes what we know about entrepreneurship in post-conflict countries and puts the knowledge into a conceptual model. By unraveling the factors and mechanisms through which entrepreneurship can drive economic recovery and peacebuilding in such countries, our study not only has an academic value but is also of high practical relevance.