Institutional Environment as a Factor of Entrepreneurial Choice: Cross-Country Analysis

The main objective of this research is to investigate the influence that the country’s institutional environment produces on nascent entrepreneurs. Entrepreneurship is strongly connected with the future uncertainty and risk, and not everyone is eager to take part in this venture, but according to the global tendency, the number of people, who have started their own business, increases every year. There are many factors that influence personal propensity to become an entrepreneur; this investigation examines the institutional ones. Nowadays it is rather relevant to explain the differentiation of the entrepreneurial activities among different countries by the peculiarity of their institutional environments. For the purpose of this research, we have chosen five factors as consistent with the Whitley’s classification (1999): financial and educational capitals, governmental protection, regulatory complexity and corruption perception. Due to the assumption that in different countries institutional factors can produce different influence on entrepreneurship, countries, whose data were used in this investigation, were divided into three groups: factor-, efficiency- and innovation-driven. The relation between nascent entrepreneurship and institutional environment was confirmed using the econometrics models on the panel data 2003-2014. The data for this study were compiled from the Global Entrepreneurship Monitor, World Bank and Transparency International. The results demonstrate the direct relations between the share of nascent entrepreneurship and the corruption perception index. Moreover, the lack of regulatory complexities shows a positive influence on the nascent entrepreneurship. For the innovation-driven countries the hypothesis of the direct dependence between educational capital and the share of entrepreneurship was proved.