Institutional context and entrepreneurial dynamism: Corruption, distance to frontier, perceived opportunity and entrepreneurial activity

Thaung Han, University of Texas at El Paso


This dissertation hypothesizes that corruption has both beneficial and detrimental effects on the entrepreneurial opportunity, and that such relationships is contingent on different levels of overall regulatory condition in ease of doing business. Beneficial effects and positive relationship can be seen in countries with poor regulatory procedures and the opposite is true for the countries with well-established ones, a complex relationship which could be visualized as a U-shaped relationship. This dissertation further proposes that entrepreneurial perceived opportunity in turn positively relates to entrepreneurial intention, and this relationship is moderated by the facilitating effects of corruption to overcome the uncertainties and barriers in doing business. Drawing on institutional theory, structuration theory, theory of planned behavior, and employing legacy dialog tools and regression analysis, 45 countries from different regions, political systems, economies, and population sizes are examined employing multiple data from the Global Entrepreneurial Monitor (GEM), Transparency International's Corruption Perception Index (CPI), and the World Bank Global Indicators for the period 2011. Empirical results support the greasing the wheels hypothesis of corruption on entrepreneurial opportunity which competes with the sand the wheels hypothesis, a generally accepted negative consequences perception of corruption on the economic development. A second single cross sectional data set that consists of 88 countries for the period that covers 2008–2011 is again employed to test the robustness of the results. The findings contribute to a deeper understanding of the complex influences of corruption on the process of entrepreneurship, especially on the entrepreneurial perceived opportunity and intention to start a new business venture, which further can lead to the development of optimal policies, entrepreneurial theories and practices, both in controlling corruption and promoting entrepreneurship across countries.

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Recommended Citation

Han, Thaung, "Institutional context and entrepreneurial dynamism: Corruption, distance to frontier, perceived opportunity and entrepreneurial activity" (2014). ETD Collection for University of Texas, El Paso. AAI3625220.