No substitute for strong institutions: Impact of accelerators on new venture performance

Pramendra Singh Tank, Dibyendu Sharma and Divyanshu Jain

Journal of Business Venturing Insights, 2024, vol. 22, issue C

Abstract: Accelerators are gaining popularity in the entrepreneurship ecosystem for accelerating new ventures by providing benefits such as learning, sorting, and signaling. However, theoretical tension exists about whether these benefits are contingent on quality of institutions. The institutional-void view suggests that accelerator benefits are more pronounced in countries with weak institutions, while the institutional-support view posits the importance of strong institutions for realizing the benefits of accelerators. In this study, we theorize and test the moderating role of institutions in assessing the impact of accelerators on new venture performance using a generalized difference-indifferences technique on a worldwide accelerator database. At the baseline, the findings are consistent with previous literature, which shows a positive impact of accelerators on new ventures performance. More importantly, the key insight of our study is that the positive impact of accelerators is higher in countries with stronger institutions, thus favoring the institutional-support view. These findings contribute to emerging empirical research that assesses the impact of business accelerators on new venture performance.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jobuve:v:22:y:2024:i:c:s235267342400043x

DOI: 10.1016/j.jbvi.2024.e00491

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