Institutional Change and Entrepreneurship: The Impact of Political Institutional Change

Shami, Muntasir

doi:10.5465/ambpp.2016.13928abstract

Cited by 1 publication

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“…These institutional-related constraints lower the return to productive entrepreneurial activity and may cause an economy to operate inside its production possibilities frontier. In line with this view, empirical work by Shami (2019) finds that the quality of institutions plays a central role in increasing productive entrepreneurship. Parente and Prescott (2002) argue that economic growth is hindered by government regulations and protection of monopoly rights that serve as "strong barriers to the adoption of better technologies," (p. 104) which are critical to promote growth and improve standards of living.…”

Section: Theoretical Frameworkmentioning

confidence: 77%

Reassessing the linkages among entrepreneurship, institutions and growth

Giorno,

Tebaldi

2024

RBE

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This article examines the role of institutions and entrepreneurship to foster economic development under increasing complex economic structures caused by structural changes. The empirical work utilizes data from several sources including the Penn World Table 9.1, The Global Entrepreneurship and Development Institute, the Observatory of Economic Complexity (OEC) at the MIT, and The International Country Risk Guide (ICRG). The empirical work circumvents the endogeneity and heterogeneity problem that plague cross-country regressions by using the Arellano and Bover (1995) and Blundell and Bond (1998) system GMM estimator. The results show that while entrepreneurship is positively correlated to economic development, this correlation disappears when controlling for heterogeneity and/or for differences in quality of institutions. There is also evidence that the importance of institutional quality for economic development increases when an economy become more complex. Overall, findings of this research suggest that quality of institutions is not only important to foster entrepreneurship, but also very important to mediate complex economic structures that emerge as part of the development process and structural changes. The main policy implication of this work is that economies in transition must take steps to improve the quality of their institutions, particularly of institutions that enable productive entrepreneurship and mediate the increased complexity resulting from the inherent structural transformation associated with economic development.

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Section: Theoretical Frameworkmentioning

confidence: 77%