Informal institutions and technology entrepreneurship in emerging markets: A multi-level model

Document Type

Conference Proceeding

Publication Date



Given the increasing relevance of emerging economies in the global economy and the neoclassical argument that technological progress is the main long-run driver of economic growth, we investigate the under-researched role of informal institutions on the likelihood that individuals will enter into technology entrepreneurship in emerging markets. In particular, attention is paid to the size of the shadow economy, cultural diversity, and cultural conflict, all of which have previously been found to be negatively associated with the overall economic experiences of developing and least developed countries. Notwithstanding, we find that as they relate to technology entrepreneurship in emerging economies, the size of the shadow economy has a U-shaped relationship; ethnic diversity is positively associated; and ethnic polarization is negatively associated, though the latter is not significant. Our findings contribute to extant literature and effective policy-making, and were attained using a multi-level model to test hypotheses on a dataset comprising of 10,280 observations obtained from the Global Entrepreneurship Monitor (GEM) survey for years 2002-2008 and pertaining to technology entrepreneurship in 18 emerging countries.

Publication Title

Academy of International Business - Southeast USA 2012 Annual Conference