Entrepreneurship and Institutions: A Bidirectional Relationship

Niklas Elert () and Magnus Henrekson ()

No 1153, Working Paper Series from Research Institute of Industrial Economics

Abstract: The interplay between entrepreneurship and institutions is crucial for economic development; however, the view that institutions determine the extent to which entrepreneurial activity is productive is only part of the story. We argue that causality is bidirectional, in that entrepreneurship is also, for better or for worse, one of the main drivers of institutional change. Through their actions, entrepreneurs have a fundamental influence on institutions, whether they abide by them, actively try to alter them, or evade them. Particular attention is given to evasive entrepreneurship, an entrepreneurial function which, until recently, has been an underappreciated and poorly understood source of innovation and institutional change. We argue that the influence of evasive entrepreneurship on the economic trajectories of societies is likely to only grow in the future.

Keywords: Economic development; Entrepreneurship; Evasive entrepreneurship; Innovation; Institutional change; Regulation (search for similar items in EconPapers)
JEL-codes: L50 M13 O31 P14 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2017-02-16, Revised 2017-05-05
New Economics Papers: this item is included in nep-ent, nep-gro, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Published as Elert, Niklas and Magnus Henrekson, 'Entrepreneurship and Institutions: A Bidirectional Relationship' in Foundations and Trends in Entrepreneurship, 2017, pages 191-263.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1153

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