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The impact of weak formal institutions on the different phases of the entrepreneurial process

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  • Junaid, Danish
  • He, Zheng
  • Afzal, Farman

Abstract

While many studies examine the impact of weak formal institutions on nascent entrepreneurial activity, little attention is paid to how weak formal institutions affect the other three phases of the entrepreneurial process, i.e., intentions to start a business, new business activity, and established business. To fill this gap, this study examined how weak market and state institutions influence different phases of the entrepreneurial process. This study used data from the Global Entrepreneurship Monitor, the Index of Economic Freedom and the World Governance Indicators for 74 countries from 2008 to 2016, and applied multilevel modeling to conduct an empirical analysis. We found mixed effects of weak formal institutions on different entrepreneurial phases. In particular, weak market institutions restrict all phases of the entrepreneurial process, i.e. entrepreneurial intentions, nascent entrepreneurial activity and new business activity and established business. Weak state institutions facilitate new business activity and established business phases of the entrepreneurial process.

Suggested Citation

  • Junaid, Danish & He, Zheng & Afzal, Farman, 2022. "The impact of weak formal institutions on the different phases of the entrepreneurial process," Journal of Business Research, Elsevier, vol. 144(C), pages 236-249.
    • Handle: RePEc:eee:jbrese:v:144:y:2022:i:c:p:236-249
    DOI: 10.1016/j.jbusres.2022.01.040
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    Cited by:

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    2. Núñez, Yilsy M. & Morales-Alonso, Gustavo, 2024. "Longitudinal study of necessity- and opportunity-based entrepreneurship upon COVID lockdowns - The importance of misery and economic freedom indexes," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    3. Fernandez, Viviana, 2024. "Micro-angel investments of men and women: The role of institutions," Research in International Business and Finance, Elsevier, vol. 70(PB).

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