Thumbnail Image

Decomposing the effects of institutions on entrepreneurship: 3 essays on institutional uncertainty, entrepreneurial intent and action

Monteiro Christoph D'Andrea, Fernando Antonio
The three essays in this dissertation explore how the institutional background influences entrepreneurial intent and action. This is done by exploring the mechanism of institutional uncertainty, a subjective perception about the different institutional characteristics that mediate the impact of institutions on the way individuals act. The first paper conceptualizes the connections between institutions, informal and formal, and entrepreneurial action. It establishes that institutional uncertainty emerges from six different institutional characteristics: Quality and Stability of the informal and formal institutions, the Alignment between informal and formal institutions, and the Burden imposed by formal institutions. Those six characteristics, individually and in conjunction, influence entrepreneurial intentions and actions. The second paper takes a macro approach and uses over 10,000 archival data points to create two proprietary databases and test the propositions advanced in the first paper at both the country-level and state- level using data from the United States. I find evidence that institutions matter for entrepreneurship beyond the Quality of formal institutions. In particular, I find evidence for the importance of informal institutional Quality and for the Stability and Burden imposed by formal institutions. I also create a cross-country Institutional Uncertainty Index that is robust when compared to other similar measures. The third paper takes a micro perspective and investigates how individuals’ perception of institutional uncertainty influences their entrepreneurial intentions. Relying on subjectivity, I use a survey and two online experiments with 235 individual responses from over 20 countries and over 1,500 valid responses for the dependent variable. I find evidence that the subjective perception of institutional uncertainty is what influences entrepreneurial intentions. While the objective measure of institutional uncertainty does not have a direct influence on these same intentions. I also find evidence that individuals see different institutional characteristics differently, suggesting that greater attention should be given to features beyond the Quality of formal institutions. Overall, this dissertation conceptualizes institutional uncertainty, explains its characteristics, and provides evidence for the importance of each of these characteristics in the entrepreneurial process.