A multi-level analysis of the relationship between formal institutions and ambitious entrepreneurship: The moderating role of economic development

Bendig, David; Kleine-Stegemann, Lucas; Mazur, Michael; Zapkau, Florian

Abstract

Prior research predominantly focuses on institutional drivers of different levels of entrepreneurship across countries instead of specific types of entrepreneurship that can create considerable economic impact. In contrast, we investigate which formal institutions (i.e., government integrity, regulatory efficiency, and trade freedom) affect ambitious entrepreneurship (AE). Ambitious entrepreneurs are both opportunity-driven and innovative. Moreover, we introduce economic development as a boundary condition of these relationships. Using a multi-level research design and analyzing data from the Global Entrepreneurship Monitor (GEM) with 2,121,002 individuals from 101 countries, we find that regulatory efficiency and trade freedom positively affect AE. Surprisingly, government integrity negatively impacts AE, but higher economic development mitigates this negative relationship. Our study informs the discussion on the nexus between comparative international entrepreneurship, institutions, and economic development.