WOODHOUSE, Drew (2020). Institutional varieties and entrepreneurship: an empirical analysis. Doctoral, Sheffield Hallam University.
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Woodhouse_2020_PhD_InstitutionalVarietiesEntrepreneurship.pdf - Accepted Version
Available under License Creative Commons Attribution Non-commercial No Derivatives.
Woodhouse_2020_PhD_InstitutionalVarietiesEntrepreneurship.pdf - Accepted Version
Available under License Creative Commons Attribution Non-commercial No Derivatives.
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Abstract
A growing body of literature on comparative international entrepreneurship has focussed
on exploring the factors that explain differences in entrepreneurial activity across
countries. In particular, the institutional environment is regarded as a crucial influence
on this activity, yet there is less agreement about which institutions matter, and more
importantly, in what ways do they matter. Much of the research focussed on explaining
the influence of institutions on entrepreneurship has taken a specific and narrow
approach to institutional theory. This views institutions as ‘converging’ creations which
posit a theoretical ‘one-best-way’, largely seen as liberal and non-interventionist. This
approach to institutional theory overlooks the nuanced diversity of the institutional
environment which defines the architecture of capitalist economies.
In order to develop a broader understanding of this phenomenon, this thesis utilises
perspectives from comparative institutionalism. The intent of this research is to
empirically understand institutional diversity across countries, and its potential impact
on comparative international entrepreneurship.
This study utilises a quantitative approach with two sequential steps. The first
step comprises of a principal components analysis with the attempt to develop robust
quantitative variables which proxy for a countries institutional context. A cluster analysis of these variables is further employed to provide an objective contextual taxonomy
of institutions and ‘diversities of institutional systems’. This objective contextual
taxonomy helps give legitimacy to such diversity approach. The variables here are
then transformed for the second step, which utilises multivariate panel modelling. The
overall aim of this step is to estimate various model specifications outlining potential
statistical relationships and directions between institutional diversities and aggregate
level of entrepreneurship.
The results of this analysis present three key contributions. Firstly, that there exists
rich institutional diversity between political economies, identified by nine taxonomies
of countries across an optimum clustering of four ‘modes of capitalism’, defined by
complementary variants across institutional sub-spheres. Secondly, the relationship
between the degree of institutional coordination within the institutional complementarity
format and the level of entrepreneurial activity is non-linear. Specifically, the
relationship is quadratic and ‘U’ shaped. Where the institutional structure of the
political economy allows for higher levels of market coordination or higher levels of
strategic coordination, estimated entrepreneurship rates are higher than they are when
there is more variation in the types of institutional complementarity present in the
political economy. Thirdly, aggregate performance of entrepreneurship is moderated
by the institutional configuration of the political economy. Institutional coherence
identified by this perspective appear to offer general efficiencies. Therefore, these
results suggest that institutional explanations of entrepreneurship can be explained by
‘equifinality’, in that a ‘perfect’ institutional setting does not exist.
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