Entrepreneurial quality in emerging economies: does communist legacy matter?

We investigate the impact of communist legacy on manifestations of entrepreneurial quality by comparing nascent entrepreneurs and owner-managers in two groups of emerging economies: non-transition and transition emerging economies. The latter group underwent a systemic transition from a communist, command-type economy to a market economy system after 1990. Using data from the Global Entrepreneurship Monitor (2010-2018), our multi-level regressions reveal three main results. First, we found robust evidence for a general communist legacy (or imprinting) effect related to innovation: entrepreneurs in transition emerging economies are less likely to be involved in innovation activities than entrepreneurs in non-transition emerging economies. Second, for another manifestation of entrepreneurial quality – growth ambitions – we found evidence of an imprinting effect that applies to business owners rather than nascent entrepreneurs. Third, we found that the length of communist exposure and the rigidity of the regime matter for innovation and growth ambitions among business owners. Our findings suggest that, decades after the collapse of Communism, imprinting effects on entrepreneurial quality are still present. The hesitant attitude towards innovation activities and growth ambitions by entrepreneurs in transition emerging economies calls for increased investments in entrepreneurship education that focuses on risk-taking attitudes of individuals.