IDEAS home Printed from https://ideas.repec.org/a/spr/joiaen/v13y2024i1d10.1186_s13731-024-00441-0.html
   My bibliography  Save this article

Nations’ share of innovative entrepreneurs: financial systems to the rescue in difficult institutional settings

Author

Listed:
  • Colin David Reddy

    (University of Johannesburg)

Abstract

With much of the literature declaring little role for financial systems in boosting a nation's share of innovative entrepreneurs, this study argues that financial systems play an important role when other parts of the national business systems —skills and government— are weak. This argument is supported by an analysis of a panel data set comprising 283 country-year data over five years. Overall, this research contributes to a stream of research about the context for entrepreneurial aspirations or entrepreneurship quality. The study empirically confirms an idea seldom tested: the interplay required between systems components, such as institutions, to increase national innovative capacity.

Suggested Citation

  • Colin David Reddy, 2024. "Nations’ share of innovative entrepreneurs: financial systems to the rescue in difficult institutional settings," Journal of Innovation and Entrepreneurship, Springer, vol. 13(1), pages 1-16, December.
    • Handle: RePEc:spr:joiaen:v:13:y:2024:i:1:d:10.1186_s13731-024-00441-0
    DOI: 10.1186/s13731-024-00441-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s13731-024-00441-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1186/s13731-024-00441-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Beck, Thorsten & Demirguc-Kunt, Asli, 2006. "Small and medium-size enterprises: Access to finance as a growth constraint," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2931-2943, November.
    2. Paul Reynolds & Niels Bosma & Erkko Autio & Steve Hunt & Natalie De Bono & Isabel Servais & Paloma Lopez-Garcia & Nancy Chin, 2005. "Global Entrepreneurship Monitor: Data Collection Design and Implementation 1998–2003," Small Business Economics, Springer, vol. 24(3), pages 205-231, February.
    3. Pourya Darnihamedani & Joern Hendrich Block & Jolanda Hessels & Aram Simonyan, 2018. "Taxes, start-up costs, and innovative entrepreneurship," Small Business Economics, Springer, vol. 51(2), pages 355-369, August.
    4. Harry P Bowen & Dirk De Clercq, 2008. "Institutional context and the allocation of entrepreneurial effort," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(4), pages 768-768, June.
    5. Christopher John Boudreaux, 2017. "Institutional quality and innovation: some cross-country evidence," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 6(1), pages 26-40, April.
    6. Gifford, Sharon, 1992. "Allocation of entrepreneurial attention," Journal of Economic Behavior & Organization, Elsevier, vol. 19(3), pages 265-284, December.
    7. Pezeshkan, Amir & Smith, Adam & Fainshmidt, Stav & Amini Sedeh, Amirmahmood, 2016. "National business systems and firm innovation: A study of developing economies," Journal of Business Research, Elsevier, vol. 69(11), pages 5413-5418.
    8. Bengt-Åke Lundvall, 1999. "National Business Systems and National Systems of Innovation," International Studies of Management & Organization, Taylor & Francis Journals, vol. 29(2), pages 60-77, June.
    9. Sergey Anokhin & Joakim Wincent, 2012. "Start-up rates and innovation: A cross-country examination," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(1), pages 41-60, January.
    10. William P. Wan, 2005. "Country Resource Environments, Firm Capabilities, and Corporate Diversification Strategies," Journal of Management Studies, Wiley Blackwell, vol. 42(1), pages 161-182, January.
    11. Tore Frimanslund & Grzegorz Kwiatkowski & Ove Oklevik, 2023. "The role of finance in the literature of entrepreneurial ecosystems," European Planning Studies, Taylor & Francis Journals, vol. 31(2), pages 372-391, February.
    12. Bengt-Åke Lundvall, 2007. "National Innovation Systems—Analytical Concept and Development Tool," Industry and Innovation, Taylor & Francis Journals, vol. 14(1), pages 95-119.
    13. Yoon, Hyungseok (David) & Kim, Namil & Buisson, Bernard & Phillips, Fred, 2018. "A cross-national study of knowledge, government intervention, and innovative nascent entrepreneurship," Journal of Business Research, Elsevier, vol. 84(C), pages 243-252.
    14. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    15. Fernando de Souza Bastos & Wagner Barreto-Souza, 2021. "Birnbaum–Saunders sample selection model," Journal of Applied Statistics, Taylor & Francis Journals, vol. 48(11), pages 1896-1916, August.
    16. Klaus E. Meyer & Saul Estrin & Sumon Kumar Bhaumik & Mike W. Peng, 2009. "Institutions, resources, and entry strategies in emerging economies," Strategic Management Journal, Wiley Blackwell, vol. 30(1), pages 61-80, January.
    17. William J. Baumol, 2013. "The Microtheory of Innovative Entrepreneurship," Journal of Economic Sociology, National Research University Higher School of Economics, vol. 14(3), pages 96-108.
    18. Pekka Stenholm & Zoltán J. Ács & Robert Wuebker, 2015. "Exploring country-level institutional arrangements on the rate and type of entrepreneurial activity," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 20, pages 387-404, Edward Elgar Publishing.
    19. Munemo, Jonathan, 2017. "Foreign direct investment and business start-up in developing countries: The role of financial market development," The Quarterly Review of Economics and Finance, Elsevier, vol. 65(C), pages 97-106.
    20. Wennberg, Karl & Wiklund, Johan & Wright, Mike, 2011. "The effectiveness of university knowledge spillovers: Performance differences between university spinoffs and corporate spinoffs," Research Policy, Elsevier, vol. 40(8), pages 1128-1143, October.
    21. Philipp Koellinger, 2008. "Why are some entrepreneurs more innovative than others?," Small Business Economics, Springer, vol. 31(1), pages 21-37, June.
    22. Christine Oliver, 1997. "Sustainable competitive advantage: combining institutional and resource‐based views," Strategic Management Journal, Wiley Blackwell, vol. 18(9), pages 697-713, October.
    23. Nofsinger, John R. & Wang, Weicheng, 2011. "Determinants of start-up firm external financing worldwide," Journal of Banking & Finance, Elsevier, vol. 35(9), pages 2282-2294, September.
    24. Giacomo Zanello & Xiaolan Fu & Pierre Mohnen & Marc Ventresca, 2016. "The Creation And Diffusion Of Innovation In Developing Countries: A Systematic Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 30(5), pages 884-912, December.
    25. Rudra P. Pradhan & Mak B. Arvin & John H. Hall & Mahendhiran Nair, 2016. "Innovation, financial development and economic growth in Eurozone countries," Applied Economics Letters, Taylor & Francis Journals, vol. 23(16), pages 1141-1144, November.
    26. Cédric Schneider & Reinhilde Veugelers, 2010. "On young highly innovative companies: why they matter and how (not) to policy support them," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(4), pages 969-1007, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ali, Abdul & Kelley, Donna J. & Levie, Jonathan, 2020. "Market-driven entrepreneurship and institutions," Journal of Business Research, Elsevier, vol. 113(C), pages 117-128.
    2. Kleinhempel, Johannes & Estrin, Saul, 2024. "Realizing expectations?," MPRA Paper 120863, University Library of Munich, Germany.
    3. Audretsch, David B. & Belitski, Maksim & Chowdhury, Farzana & Desai, Sameeksha, 2024. "Regulating entrepreneurship quality and quantity," Research Policy, Elsevier, vol. 53(2).
    4. Aparicio, Sebastian & Urbano, David & Audretsch, David, 2016. "Institutional factors, opportunity entrepreneurship and economic growth: Panel data evidence," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 45-61.
    5. 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.
    6. Niels Bosma & Jeroen Content & Mark Sanders & Erik Stam, 2018. "Institutions, entrepreneurship, and economic growth in Europe," Small Business Economics, Springer, vol. 51(2), pages 483-499, August.
    7. Pindado, Emilio & Sánchez, Mercedes & García Martínez, Marian, 2023. "Entrepreneurial innovativeness: When too little or too much agglomeration hurts," Research Policy, Elsevier, vol. 52(1).
    8. Lucio Fuentelsaz & Consuelo González & Juan P. Maícas, 2021. "High-growth aspiration entrepreneurship and exit: the contingent role of market-supporting institutions," Small Business Economics, Springer, vol. 57(1), pages 473-492, June.
    9. José Ernesto Amorós & Luciano Ciravegna & Vesna Mandakovic & Pekka Stenholm, 2019. "Necessity or Opportunity? The Effects of State Fragility and Economic Development on Entrepreneurial Efforts," Entrepreneurship Theory and Practice, , vol. 43(4), pages 725-750, July.
    10. Kleinhempel, Johannes & Klasing, Mariko & Beugelsdijk, Sjoerd, 2022. "Cultural Roots of Entrepreneurship," MPRA Paper 115942, University Library of Munich, Germany.
    11. Zoltán J. Ács & Erkko Autio & László Szerb, 2015. "National Systems of Entrepreneurship: Measurement issues and policy implications," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 28, pages 523-541, Edward Elgar Publishing.
    12. Pourya Darnihamedani & Joern Hendrich Block & Jolanda Hessels & Aram Simonyan, 2015. "Start-up Costs, Taxes and Innovative Entrepreneurship," Tinbergen Institute Discussion Papers 15-013/VII, Tinbergen Institute.
    13. Maurer, Joshua D. & Creek, Steven A. & Bendickson, Joshua S. & McDowell, William C. & Mahto, Raj V., 2022. "The three pillars’ impact on entrepreneurial activity and funding: A country-level examination," Journal of Business Research, Elsevier, vol. 142(C), pages 808-818.
    14. Amirmahmood Amini Sedeh & Amir Pezeshkan & Rosa Caiazza, 2022. "Innovative entrepreneurship in emerging and developing economies: the effects of entrepreneurial competencies and institutional voids," The Journal of Technology Transfer, Springer, vol. 47(4), pages 1198-1223, August.
    15. R. Sandra Schillo & Ajax Persaud & Meng Jin, 2016. "Entrepreneurial readiness in the context of national systems of entrepreneurship," Small Business Economics, Springer, vol. 46(4), pages 619-637, April.
    16. Christopher J. Boudreaux & Daniel L. Bennett & David S. Lucas & Boris N. Nikolaev, 2023. "Taking mental models seriously: institutions, entrepreneurship, and the mediating role of socio-cognitive traits," Small Business Economics, Springer, vol. 61(2), pages 465-493, August.
    17. Chengguang Li & Rodrigo Isidor & Luis Alfonso Dau & Rudy Kabst, 2018. "The More the Merrier? Immigrant Share and Entrepreneurial Activities," Entrepreneurship Theory and Practice, , vol. 42(5), pages 698-733, September.
    18. Bobillo, Alfredo M. & López-Iturriaga, Felix & Tejerina-Gaite, Fernando, 2010. "Firm performance and international diversification: The internal and external competitive advantages," International Business Review, Elsevier, vol. 19(6), pages 607-618, December.
    19. Liu, Xiaohui & Xia, Tianjiao & Jiangyong, Lu & Lin, Daomi, 2019. "Under what institutional conditions does overseas business knowledge contribute to firm performance?," International Business Review, Elsevier, vol. 28(3), pages 588-602.
    20. Orcos, Raquel & Pérez-Aradros, Beatriz & Blind, Knut, 2018. "Why does the diffusion of environmental management standards differ across countries? The role of formal and informal institutions in the adoption of ISO 14001," Journal of World Business, Elsevier, vol. 53(6), pages 850-861.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:joiaen:v:13:y:2024:i:1:d:10.1186_s13731-024-00441-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.