Institutions and entrepreneurship in a non-ergodic world

Abstract

Research Summary

This special issue advances the global strategy and entrepreneurship fields by providing a better understanding of the linkage between institutions and entrepreneurship. We provide an overview of existing literature in three key research areas: (a) the impact of institutions (types and complexity) on entrepreneurship, (b) the effect of institutional evolution (overall evolution and interplay among institutions) on entrepreneurship, and (c) the coevolution of institutions and entrepreneurship. We introduce the eight articles appearing in this special issue, examine the relationship between institutions and entrepreneurship in a non-ergodic world, and highlight meaningful and promising avenues for future research in each of the three key research areas in the domain of institutions and entrepreneurship.

Managerial Summary

This study clarifies the complex relationship between institutions (the rules and norms that govern economic transactions) and entrepreneurship. Our discussion of existing literature, special issue articles, institutions and entrepreneurship in a world of significant change, and several promising avenues for future research highlights to entrepreneurs and their stakeholders the critical role that institutions play in entrepreneurial strategies and actions in three ways. First, the types of institutions and their complexity in a location alter entrepreneurs' incentives and ability to create new ventures. Second, the continued changes in institutions - some in favor of free-market relationships and others restricting them - alter entrepreneurs' behaviors. Third, the entrepreneurial spirit and the creation of new ventures can drive the transformation of institutions that govern future market transactions.