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http://dx.doi.org/10.13106/jafeb.2022.vol9.no7.0109

Formal and Informal Institutional Nexus with Entrepreneurial Growth: The Role of the Political Development Index  

MUKHTAR, Bazla (Department of Entrepreneurship, Institute of Business Management)
ZUBAIR, Muhammad (Department of Entrepreneurship, Institute of Business Management)
FASIH, Syeda Tayyaba (Department of Entrepreneurship, Institute of Business Management)
HUSSAIN, Munir (Department of Entrepreneurship, Institute of Business Management)
BUTT, Rehan Muzamil (Department of Entrepreneurship, Institute of Business Management)
Publication Information
The Journal of Asian Finance, Economics and Business / v.9, no.7, 2022 , pp. 109-121 More about this Journal
Abstract
The study aims to examine the interaction of formal and informal institutions for strengthening economic development, particularly entrepreneurship growth. The research will also assess the impact of control variables on political index within the formal and informal markets. The research is quantitative, which analyses panel data of 6 years in 22 countries comprising middle and high-income countries with diversified and unique political, economic, and social systems. The findings suggested that reducing the entry regulation and promoting the social capital within the formal and informal institutions would grow formal and informal entrepreneurship and be a greater source for new venture creation. Moreover, the political index, a control variable, was found significant in the relationship of institutional mix with formal and informal entrepreneurship. Entry regulations in formal and informal institutions are a complex phenomenon in the entrepreneurship literature, moderated by the political development index as tested by the current study. The time horizon for this paper is much longer since it analyzes 6 years (2014-2019) of data on 22 developing and developed countries to see the entrepreneurial growth across multiple regions on different income levels, geographic conditions, and contrasting political and social systems.
Keywords
Formal Institutions; Informal Institutions; Formal Entrepreneurship; Informal Entrepreneurship; Institutional Mix;
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