How do institutions matter for innovative entrepreneurship? An investigation at the regional scale

2021-7-2
demirdağ, ismail
Entrepreneurship, which is widely regarded as the primary source of employment, technological progress, innovation and sustainable economic growth and development, differs significantly in terms of level and type across countries and even regions of the same country. Numerous studies have tried to explain why the level and type of entrepreneurship vary by regions with various regional determinants such as human capital, financial resources, unemployment, urbanisation, natural opportunities, industrial cluster and infrastructure. However, over time, a growing number of studies have demonstrated that these determinants alone are insufficient to determine the level and type of regional entrepreneurship, but rather that ‘institutions’ defined as the rules of the game that shape interactions between individuals in society, play a more effective role. However, although the current literature has provided significant evidence on the effects of institutions on regional entrepreneurship activities, there are important gaps in the literature. In this sense, using Scott’s three-dimensional institutions' definition, this study aims to explore, understand and explain how and to what extent the regulative (laws, regulations, rules and policies), normative (norms, values, beliefs and traditions) and culture-cognitive (socially shared knowledge) dimensions/pillars of institutions determine the level of regional innovative (or innovation-driven) entrepreneurship. More precisely, by adopting the ‘Exploratory Sequential Mixing Method’, which consists of qualitative and quantitative research methods, this thesis tries to demonstrate the extent to which the three dimensions of institutions play a decisive role in explaining the innovative entrepreneurship level differences of NUTS-III level regions (or provinces i.e., Van, Elazığ, Bolu and Adana) in Turkey. Using primary data obtained through in-depth interviews (43 participants) and a subsequent survey questionnaires (170 entrepreneurs), this research uses content analysis to analyse qualitative data, while factor, ANOVA, MANOVA, Discriminant Function and Multinomial Logistic Regression analyses to test quantitative data. The study's findings clearly showed that all three dimensions of the institutions play critical roles in determining the innovative entrepreneurship levels of the provinces. Using provinces with different levels of innovative entrepreneurship, this study revealed that regions with low-quality institutions have relatively lower innovative entrepreneurship activities, on the contrary, those with high-quality institutions have higher innovativeness. In addition, the findings showed that compared to the regulatory dimension of institutions, the normative and culture-cognitive dimensions play more decisive roles in explaining the innovative entrepreneurship level differences between the provinces. However, as with most studies, this study has some limitations. The lack of data sets on institutional dimensions and innovative entrepreneurship activities at the regional level is one of the main limitations of this study. Yet, by providing evidence showing how three dimensions of institutions at the regional level support or constrain innovative entrepreneurial activities, this study makes an essential contribution to the expansion of existing literature. Further, this study provides important policy recommendations at national, regional, firm and individual levels to promote regional innovative entrepreneurship activities and reduce inter-regional disparities.

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Citation Formats
i. demirdağ, “How do institutions matter for innovative entrepreneurship? An investigation at the regional scale,” Ph.D. - Doctoral Program, Middle East Technical University, 2021.