Speed of pro-market reforms and entrepreneurial innovation

Lucio Fuentelsaz (), Consuelo González () and Minerva González ()
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Lucio Fuentelsaz: Universidad de Zaragoza
Consuelo González: Universidad de Zaragoza
Minerva González: Universidad de Zaragoza

Small Business Economics, 2025, vol. 64, issue 4, No 12, 1849-1876

Abstract: Abstract This paper examines how pro-market reforms affect entrepreneurial innovation through the lens of the dynamic institution-based view of the firm. We propose that the speed at which changes occur has a positive influence on entrepreneurial innovation. Additionally, we hypothesize that, in highly uncertain environments, entrepreneurs with higher levels of entrepreneurial self-efficacy and those who have recently entered the market are better equipped to respond in terms of innovation. To test our hypotheses, we conduct a multilevel, cross-country analysis using data from the Global Entrepreneurship Monitor for the period 2009–2018, focusing on individual-level measures of entrepreneurial behavior. Our findings largely support our hypotheses, indicating that a high speed of pro-market reforms has a positive effect on entrepreneurial innovation. Furthermore, this relationship is partially mediated by entrepreneurial self-efficacy and is more pronounced among new entrepreneurs compared to established ones.

Keywords: Entrepreneurial innovation; Speed of pro-market reforms; Institutional change; GEM; Entrepreneurial strategy (search for similar items in EconPapers)
JEL-codes: L26 M13 O31 O38 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11187-024-00980-6

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