An Empirical Investigation into Institutions Unlocking Entrepreneurial Activity

Abstract

Entrepreneurship scholars tend to agree that institutional factors influence entrepreneurship; however, empirical studies have led to different conclusions with regard to the relative importance of each driver. This study empirically investigates the influence that the regulatory, cognitive, normative and conducive institutional factors have on different types of entrepreneurial activity (EA) in South Africa. Following a survey of 163 ventures, regression results reveal that it is the cognitive and conducive institutional environments, which have a significant impact on EA. These results highlight the importance of institutional environmental factors in relation to opportunity-based EA. Additionally, the findings provide key insights to scholars and policymakers where institutional factors in an emerging market context serve as a catalyst for EA.