Recent research on African economies underscores the critical role of institutional frameworks in shaping entrepreneurial outcomes. This commentary engages with a specific published study examining the interplay between formal institutions and entrepreneurial agency within The Gambia's investment climate. This commentary aims to critically analyse the aforementioned study's conceptualisation of institutional voids and entrepreneurial resilience. It seeks to extend the discussion by integrating a behavioural finance perspective on how cognitive biases influence entrepreneurs' navigation of weak formal structures. The approach is a conceptual and critical analysis, deconstructing the theoretical premises and empirical interpretations of the original research. It synthesises these findings with established behavioural theories to propose an augmented analytical lens. The original study's finding that over 70% of surveyed entrepreneurs relied predominantly on informal networks to secure capital is reinterpreted. This behaviour is framed not merely as a coping mechanism but as a heuristic-driven response to profound information asymmetry and trust deficits in formal markets. A purely institutional analysis is insufficient for understanding investment behaviours in contexts like The Gambia. Incorporating behavioural finance concepts reveals how heuristics and social preferences fundamentally mediate the relationship between institutional frameworks and entrepreneurial action. Future research should employ mixed-methods designs that quantitatively measure cognitive biases alongside qualitative assessments of institutional perceptions. Policy interventions must address both structural constraints and the behavioural realities of economic actors. institutional voids, entrepreneurial finance, behavioural biases, heuristics, The Gambia, investment climate This commentary provides a novel behavioural finance lens for interpreting existing empirical data on institutional constraints, proposing a integrated micro-meso analytical framework for future study.
Jallow et al. (2007) studied this question.