Title: Institutional quality, knowledge spillovers and entrepreneurship

Authors: Niranjan Chipalkatti; Jonathan P. Doh; Meenakshi Rishi

Addresses: Albers School of Business and Economics, Seattle University, Seattle, WA 98122, USA. ' Villanova University School of Business, 800 Lancaster Ave, Villanova, PA 19085, USA. ' Albers School of Business and Economics, Seattle University, Seattle, WA 98122, USA

Abstract: We examine the impact of institutional quality on early stage and formal entrepreneurial activity and on knowledge spillovers. We use four institutional variables – the protection of property rights, business freedom, financial depth, and corruption as proxies for institutional quality. Results suggest that financial institutions matter for formal and early-stage entrepreneurship. Corruption deters formal entrepreneurship, but the presence of corrupt institutions positively influences the conversion of early-stage entrepreneurial entities into formal business ventures. The presence of scientific knowledge in the public domain encourages the knowledge spillover process to early stage entrepreneurs but is retarded by a strong legal and regulatory environment.

Keywords: entrepreneurship; institutional quality; knowledge spillovers; early stage entrepreneurial activity; formal entrepreneurial activity; institutional variables; rights protection; property rights; business freedom; financial depth; corruption; financial institutions; corrupt institutions; entrepreneurial entities; business ventures; scientific knowledge; public domain; entrepreneurs; legal environments; regulatory environments; economic policies; emerging economies; international development.

DOI: 10.1504/IJEPEE.2011.043307

International Journal of Economic Policy in Emerging Economies, 2011 Vol.4 No.4, pp.307 - 329

Available online: 24 Oct 2011 *

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