The role of entrepreneurial intention in the institution and entrepreneurial activity linkage: Cross-country evidence

Abstract

Objective: The objective of the article is to integrate the theory of planned behaviour (TPB) to argue that entrepreneurial intention plays a moderating role in the relationship between institutions and entrepreneurial activity. Research Design & Methods: The article uses panel data analysis conducted on a sample of 112 countries from 2001 to 2021, using data from the Global Entrepreneurship Monitor. Various panel regression techniques estimate the total early-stage entrepreneurial activity (TEA) conditional upon institutions and entrepreneurial intention. Findings: The study found evidence of moderating effects of entrepreneurial intention in the institution and entrepreneurial activity linkage. Results revealed a negative impact of institutions on total entrepreneurial activity, with pre-existing entrepreneurial intention at the country level mitigating this impact by 4% to 50%, depending on institution dimensions. Notably, the moderating effect of entrepreneurial intention weakens over time, lasting up to two years. Implications & Recommendations: To promote entrepreneurship, policymakers should prioritize initiatives that nurture and shape entrepreneurial intention, recognizing that the moderating effect of entrepreneurial intention weakens over time. Contribution & Value Added: This article is the first attempt to consider entrepreneurial intention as a key construct to examine the potential moderating mechanisms between institutions and entrepreneurship, drawing on the TPB. The study uncovers a new role of entrepreneurial intention in navigating the institutional context for entrepreneurial activity.

Keywords

• institutions
• entrepreneurship
• entrepreneurial intention
• theory of planned behaviour
• GEM data