EconPapers    
Economics at your fingertips  
 

Beyond institutional voids and the middle-income trap: The emerging business angel market in Malaysia

Richard Harrison (r.harrison@ed.ac.uk), William Scheela (wscheela@bemidjistate.edu), Pc Lai and Sivapalan Vivekarajah (drsivapalan@gmail.com)
Additional contact information
Richard Harrison: Business School and University of Edinburgh
William Scheela: Bemidji State University
Sivapalan Vivekarajah: Malaysian Business Angel Network

Asia Pacific Journal of Management, 2018, vol. 35, issue 4, No 6, 965-991

Abstract: Abstract Emerging economies are characterized by the presence of institutional voids which challenge and constrain the behavior of economic agents. In this paper we report on one set of agents, angel investors, in Malaysia, which investors fear is experiencing a middle-income trap whereby economic growth and new venture formation stalls due to persistent institutional voids. This research addresses this question through interviews with 19 Malaysian business angel investors in 2015, utilizing a mixed-methods approach. Results indicate that business angels in our sample generated strong returns, though they did find it a challenge to invest in and monitor new ventures in a highly uncertain and competitive environment where there is high political uncertainty, weak legal and financial support for investors and SMEs. In order to overcome weak institutional support, business angel investors develop informal institutions by co-investing and networking with family members and government officials. They also conduct careful due diligence before investing and closely monitor their investee companies after investing. This research provides several theory and practice contributions with respect to business-angel investing in emerging economies with weak formal institutional regimes.

Keywords: Business angels; Institutional theory; Emerging economies; Malaysia; Entrepreneurial ecosystems; Institutional voids; Middle-income trap (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://link.springer.com/10.1007/s10490-017-9535-y Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:asiapa:v:35:y:2018:i:4:d:10.1007_s10490-017-9535-y

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10490/PS2

DOI: 10.1007/s10490-017-9535-y

Access Statistics for this article

Asia Pacific Journal of Management is currently edited by Jane Lu

More articles in Asia Pacific Journal of Management from Springer
Bibliographic data for series maintained by Sonal Shukla (sonal.shukla@springer.com) and Springer Nature Abstracting and Indexing (indexing@springernature.com).

 
Page updated 2024-12-28
Handle: RePEc:kap:asiapa:v:35:y:2018:i:4:d:10.1007_s10490-017-9535-y