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Sustainability 2019, 11(2), 550; https://doi.org/10.3390/su11020550

Exploring the Relationship between Formal and Informal Institutions, Social Capital, and Entrepreneurial Activity in Developing and Developed Countries

1
Business Department, Pontificia Universidad Javeriana, Cali 16000, Colombia
2
Economía i empresa Department, Autónoma of Barcelona University, 08193 Barcelona, Spain
3
Business Studies Faculty, Antonio Jose Camacho, Cali 16000, Colombia
*
Author to whom correspondence should be addressed.
Received: 17 December 2018 / Revised: 10 January 2019 / Accepted: 11 January 2019 / Published: 21 January 2019
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
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Abstract

Most research on entrepreneurial activities and institutions focuses on identifying certain relationships between formal and informal institutions and entrepreneurship across economies. In this study, we advance entrepreneurship research by examining how social capital as a characteristic of the institutional environment affects the relationship between formal and informal institutions and entrepreneurial activities, differentially, in developing and developed economies. Supporting institutional theory and social capital theory, the results from our sample of 39 countries from 2001 to 2014, which contains over 30,000 identified individuals, indicate that social capital has a stronger influence in the relations between institutions and entrepreneurship. In developing countries, this influence is greater in the relationship between property rights, access to credit, subjective insecurity, and entrepreneurial activity. In developed countries, the greater effect of social capital is on the relationship between corruption and entrepreneurial activity. View Full-Text
Keywords: formal institutions; informal institutions; social capital; entrepreneurial activity in developing and developed countries formal institutions; informal institutions; social capital; entrepreneurial activity in developing and developed countries
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Escandon-Barbosa, D.; Urbano-Pulido, D.; Hurtado-Ayala, A. Exploring the Relationship between Formal and Informal Institutions, Social Capital, and Entrepreneurial Activity in Developing and Developed Countries. Sustainability 2019, 11, 550.

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