Measuring entrepreneurial orientation and institutional theory for informal enterprises: scale validation

The importance of institutional factors and entrepreneurial orientation is widely recognized in the study of entrepreneurship development, leading to the development of different measurement scales. Using the sample of 45 informal enterprises, we examined the factor structure, reliability, convergent and discriminant validity of the selected constructs adapted to measure these constructs in the context of informal enterprises in Nigeria. We examined 45 items that measure institutional factors (political, cognitive, cultural, and corruption) and entrepreneurship orientation (innovativeness, proactiveness, and risk-taking). An assessment of Cronbach’s alpha and composite reliability shows that the items measuring risk-taking, proactiveness, uncertainty avoidance, and masculinity are internally consistent. However, some of the items measuring other constructs have lower loading, highlighting their lack of internal consistency. The results also evidence convergent and discriminant validity of the measures used. We conclude that most of the items are reliable measurements of the corresponding constructs, and the constructs adapted to measure these constructs correlate positively with the alternative measure of the constructs. Thus, the measures evaluated in this study can be used to assess these constructs across informal enterprises. The paper contributes to validating the measurement scales and indices of institutional theory and theory of entrepreneurial orientation in the context of informal enterprises.