Unveiling the mechanisms that trigger entrepreneurship. An application of institutional theory

Purpose This study aims to investigate the determining factors of entrepreneurship and the significance of the institutional framework. It seeks to identify the mechanisms through which regulatory, normative and cognitive dimensions interact to impact entrepreneurial activity. Design/methodology/approach Utilizing Set-Theoretic Multi-Method Research (SMMR), this study analyzes data across 47 countries. It integrates Qualitative Comparative Analysis (QCA) and process-tracing to reveal the causal mechanisms connecting the institutional framework to entrepreneurship. Findings The results shed light on the specific mechanisms that lead to the presence or absence of entrepreneurial activity. Research limitations/implications One limitation of this study is its reliance on data from 47 countries, which might not fully represent the global diversity of institutional frameworks. The study’s findings may be influenced by the specific time-period and sample used, limiting generalizability. Practical implications The study offers valuable insights for policymakers by highlighting effective approaches to stimulate entrepreneurship and fill institutional voids. It underscores the critical role of mentorship, education, and initiatives aimed at enhancing entrepreneurial skills and capabilities. Social implications The study highlights the transformative power of entrepreneurship in driving social transitions and economic growth. It underscores the significance of both formal and informal institutions in fostering entrepreneurial activity. Policymakers should consider incorporating entrepreneurship policies into broader legislation to promote economic development and competitiveness. Originality/value The study contributes to the literature by providing new insights into the relationship between entrepreneurship and the institutional framework, emphasizing the importance of considering multiple dimensions and their interactions.