The influence of the regulatory, normative and cognitive institutions on entrepreneurial orientation in South Africa

Abstract

<jats:p> Understanding the impact that the institutional environment may have on entrepreneurial orientation (EO) in an under-explored African context is important, considering that researchers argue that firms can leverage entrepreneurship to respond to and take advantage of the institutional environment. Rather than merely use an EO aggregate, this article provides a more nuanced approach by analysing how the regulatory, normative and cognitive institutional environments influence each of the EO dimensions. The article hypotheses are confirmed where results highlight the importance of the institutional forces in shaping EO innovativeness, risk-taking and proactiveness. In particular, the cognitive institutional dimension plays a significant role in determining a firm’s EO levels, as educational attainments and other forms of human capital investments are in short supply in Africa, making them highly prized resources for firms engaged in EO. Implications suggest that firms in emerging market environments need to foster high levels of EO to effectively deal with the institution-specific conditions. </jats:p>

Academic Entrepreneurship: An Empirical Research of Invention Commercialisation

“…Busenitz et al (2000, p. 995) have defined regulatory support as "laws, regulations, and government policies that provide support for new business, reduce the risks for individuals starting a new company, and facilitate entrepreneurs' efforts to acquire resources". Rulesetting, controlling, monitoring, and even approving activities are included in the regulatory processes (Gupta et al, 2014;Scott, 1995;Urban, 2019). Enterprises can take advantage of resources which are available through the sponsored and/or supportive programmes of governments.…”

“…Enterprises can take advantage of resources which are available through the sponsored and/or supportive programmes of governments. Also, entrepreneurs can capture opportunities steaming from policies proposed by governments (Pinho & de Lurdes Martins, 2020;Rondinelli & Kasarda, 1992;Urban, 2019). Thus, government policies are likely to encourage scientists to commercialise their inventions by allowing inventors to be legally integrated into ease or protecting them from intellectual property right infringement.…”

“…Recently, both qualitative and quantitative studies showed that institutional environment played the key role in fostering entrepreneurial activities (Hoppmann & Vermeer, 2020;Nowiński et al, 2020;Perkmann et al, 2013;Nguyen et al, 2018;Shirokova et al, 2020;Urban, 2019). Indeed, the country institutional profile, including regulation, laws, rules, formal and informal norms, serve as a major reference of business venture activity in any society (Gupta et al, 2014;Chiles et al, 2007).…”

“…Therefore, institutional context establishes the essential conditions for personal decision-making, that acts a catalyst for entrepreneurial cognition and the quality of business venturing (Chowdhury et al, 2019;Sobel, 2008) and "institutional framework within which an activity is performed often determines whether this activity is productive, unproductive or destructive" (Douhan & Henrekson, 2010, p. 630). Analogously to prior researches (Gupta et al, 2014;Nowiński et al, 2020;Pinho & de Lurdes Martins, 2020;Urban, 2019), intrinsically this study assess scientists' perceptions of the institutional environment, which consists of perceived regulatory and normative supports, on the shaping their cognitive process of invention commercialisation. Misoska et al (2016) state that institutional context, which consists of regulatory and normative supports can positive or negative influences on attitude towards entrepreneurship because individuals' perception of regulations, laws, social and cultural values can result in their positive or negative assessments of entrepreneurship.…”

Relationship between the three dimensions of institutes required for entrepreneurship development

“…These three dimensions evoke three distinct but connected credibility bases ( Veciana & Urbano, 2008). All three dimensions including cognitive, normative, and regulative dimension have a relationship with entrepreneurial intention, entrepreneurial orientation, and entrepreneurial activity (Dickson & Weaver, 2008;Spencer & Gómez, 2003;Urban, 2019;Valdez & Richardson, 2013). In the case of India, no study is present which establishes the relationship between the three dimensions of institution required for entrepreneurship development.…”