The association of formal and informal institutions with total entrepreneurial activity: a neo-institutional theory approach

Mirza, Ahmed (2023) The association of formal and informal institutions with total entrepreneurial activity: a neo-institutional theory approach. PhD thesis, University of Glasgow.

Abstract

The thesis aims to identify the antecedents of total entrepreneurial activity (TEA) across OECD nations as this is key to national economic progress. Successive studies have associated TEA with informal institutions such as power distance (PD), individualism-collectivism (IND) and uncertainty avoidance (UA) but policymakers can do nothing about these in the short term. Two contributions are claimed. First, the thesis considers relatively new informal institutional dimensions (long-term orientation (LTO) and indulgence versus restraint (IVR)). However, these informal institutions (dimensions of national culture) cannot be modified by governments within a country but may influence the design of formal institutions (FIs). Thus, the second contribution arises from a consideration of two FIs (property rights (PRs) and access to finance (ATF)) as moderators of the main associations between informal institutions and TEA. These institutions may be modified by governments, so it is important to understand them, theoretically and empirically. PRs are analysed as they allow an organised market system to function, providing certainty for entrepreneurs engaging in TEA. Similarly, ATF may be needed for entrepreneurs to sustain or grow their ventures. A lack of ATF encountered by entrepreneurs is commonly viewed as the largest constraint to the creation and development of ventures. The results for this thesis are mixed, Model 1 looks at direct associations between national culture and TEA, and half of the hypotheses are supported. Model 2 (which studies the moderation by PRs and ATF of the relationships between informal institutions and TEA) has five out of the six hypotheses accepted for the PR-moderated hypotheses. This demonstrates that PRs have generally been found to have a positive moderating association with TEA, but ATF surprisingly generates an overall negative moderating association on informal institutions’ associations with TEA. OECD nations may therefore wish to encourage more effective PRs to further exploit the potential of TEA. In relation to ATF, FIs may need to tailor specific financial packages (or assistance) for specific industries which may have different gestation periods and tangible assets. Only one hypothesis appears to be accepted for ATF moderations. This may be explained by the quality of the institutional environment where a higher-quality institutional environment may have less impact as a moderator on TEA. In lower-quality institutional environments, FIs may have much more explanatory power. Overall, the models utilised in the thesis have resulted in a more nuanced study of the institutions that influence TEA.

• Item Type: Thesis (PhD)
• Qualification Level: Doctoral
• Subjects: H Social Sciences > HB Economic Theory
• Colleges/Schools: College of Social Sciences > Adam Smith Business School
• Supervisor's Name: Buck, Professor Trevor and Tang, Dr. Yee Kwan
• Date of Award: 2023
• Depositing User: Theses Team
• Unique ID: glathesis:2023-83453
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 23 Feb 2023 15:11
• Last Modified: 28 Feb 2023 09:02
• Thesis DOI: 10.5525/gla.thesis.83453
• URI: https://theses.gla.ac.uk/id/eprint/83453