Exploring the Relationship between Formal and Informal Institutions, Social Capital, and Entrepreneurial Activity in Developing and Developed Countries

Diana Escandon-Barbosa, David Urbano-Pulido and Andrea Hurtado-Ayala
Additional contact information
Diana Escandon-Barbosa: Business Department, Pontificia Universidad Javeriana, Cali 16000, Colombia
David Urbano-Pulido: Economía i empresa Department, Autónoma of Barcelona University, 08193 Barcelona, Spain
Andrea Hurtado-Ayala: Business Studies Faculty, Antonio Jose Camacho, Cali 16000, Colombia

Sustainability, 2019, vol. 11, issue 2, 1-20

Abstract: Most research on entrepreneurial activities and institutions focuses on identifying certain relationships between formal and informal institutions and entrepreneurship across economies. In this study, we advance entrepreneurship research by examining how social capital as a characteristic of the institutional environment affects the relationship between formal and informal institutions and entrepreneurial activities, differentially, in developing and developed economies. Supporting institutional theory and social capital theory, the results from our sample of 39 countries from 2001 to 2014, which contains over 30,000 identified individuals, indicate that social capital has a stronger influence in the relations between institutions and entrepreneurship. In developing countries, this influence is greater in the relationship between property rights, access to credit, subjective insecurity, and entrepreneurial activity. In developed countries, the greater effect of social capital is on the relationship between corruption and entrepreneurial activity.

Keywords: formal institutions; informal institutions; social capital; entrepreneurial activity in developing and developed countries (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/2/550/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/2/550/ (text/html)

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:gam:jsusta:v:11:y:2019:i:2:p:550-:d:199516

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().