Microlevel Analysis of Institutional Intermediation in a Rudimentary Market-Based Economy: Entrepreneurship in Kathmandu’s Indrachok Market

Will Mitchell (), Zhiyan Wu (), Garry D. Bruton () and Dhruba Kumar Gautam ()
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Will Mitchell: Department of Strategic Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada
Zhiyan Wu: Department of Strategic Management and Entrepreneurship, Erasmus University, Rotterdam, Netherlands 3062 PA
Garry D. Bruton: Department of Management and Leadership, Texas Christian University, Fort Worth, Texas 76109; School of Business, Sun Yat Sen University, Guangzhou, China; School of Business and Management, Jilin University, Changchun, China
Dhruba Kumar Gautam: Central Department of Management, Tribhuvan University, Kritipur, Nepal 44618

Organization Science, 2022, vol. 33, issue 6, 2106-2134

Abstract: Institutional theory research on institutional intermediation typically focuses on how institutional intermediaries address voids in market-based institutions that inhibit entrepreneurship. In doing so, the research rarely studies what types of institutional intermediaries entrepreneurs prefer to use. We address this gap with a microinstitutional inquiry of how entrepreneurs in a rudimentary market-based economy differ in the relevance they place on different types of institutional intermediaries. Using a sample from the Indrachok market in Kathmandu, Nepal, and using a three-stage qualitative and quantitative abductive investigation of a cascading set of increasingly refined research questions, we identify two key preferences for institutional intermediaries. First, we find a key institutional intermediation tripod consisting of three locally focused institutional intermediaries: family, suppliers, and peer entrepreneurs. The tripod is supplemented by institutional intermediaries with more moderate preference in this context: four other locally focused institutional intermediaries (local politicians, police, religious figures, and political gangs) and three broad-based institutional intermediaries (government, microlenders, and nongovernmental organizations). Second, the importance of suppliers and peers as institutional intermediaries reflects entrepreneurs’ registration status (registered versus unregistered) and microgeographic location (dispersed versus clustered businesses). The research reconceptualizes institutional intermediation in rudimentary market-based economies from the entrepreneurs’ perspective, identifying mechanisms that shape entrepreneurs’ preferences and providing proposition for future testing.

Keywords: abductive research; mixed methods; institutional intermediaries; microinstitutions; entrepreneur preference; registration status; informal business; microgeography; business clusters; rudimentary market-based economy (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:33:y:2022:i:6:p:2106-2134

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