Institutional perspectives on entrepreneurial behaviour in challenging environments

This paper examines the institutional embeddedness of entrepreneurial behavior. The institutional context influences the nature, pace of development, and extent of entrepreneurship as well as the way entrepreneurs behave. This is particularly apparent in challenging environments such as emerging market and transition economies with an uncertain, ambiguous, and turbulent institutional framework. The paper develops suggestions as to how to extend the current institutional approach by emphasizing that institutions not only influence entrepreneurs but entrepreneurs may also influence institutional development by contributing to institutional change. This also includes acknowledging the heterogeneity of entrepreneurial responses to institutional conditions, depending on the situational configuration of institutional fit, enterprise characteristics, and entrepreneur’s background, in which the role of trust as an influence on entrepreneurial behavior needs to be investigated. By focusing on these interrelationships, the paper aims to make a theoretical contribution to the field of entrepreneurship, illustrating how entrepreneurial behavior is linked to its social context.

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