scholarly journals Knight, financial institutions, and entrepreneurship in developing economies

2021 ◽  
pp. 1-15
Author(s):  
Joyce K. Nabisaalu ◽  
Per L. Bylund
Keyword(s):  
Economic Development ◽  
Developing Country ◽  
Financial Institutions ◽  
Developing Economies ◽  
Informal Institutions ◽  
Eastern Africa ◽  
Limited Extent ◽  
Access To Finance ◽  
Formal And Informal Institutions ◽  
Institutional Model

Abstract Financial institutions in developing economies fail to provide entrepreneurs with access to finance to grow their businesses. This severely hampers economic development in these countries. We seek to explain why and develop an argument and model based on Knight's theory, which we augment in two ways. First, by describing problems embedded in financial institutions of developing economies, for which we use the Schumpeterian view that creative destruction requires new credit to fund entrepreneurial disruption and de Soto's finding that undocumented assets possessed by entrepreneurs in developing economies cannot be leveraged as collateral to access finance. Second, we use Williamson's hierarchical institutional model to distinguish vertical interactions. The model is illustrated using the case of Uganda, a developing country in Eastern Africa. Our analysis finds that Uganda suffers from intertwined and misaligned formal and informal institutions, limited extent of codified property, and sparse access to finance. The findings prompt policymakers in developing economies to consider problems with and within financial institutions.

Il pensiero di Kenneth Boulding, economista irenico. Relazioni sociali tra scambio, dono e coercizione

2009 ◽  
pp. 5-30
Author(s):  
Raul Caruso
Keyword(s):  
Social Capital ◽  
Economic Development ◽  
Social Interactions ◽  
Informal Institutions ◽  
Relational Goods ◽  
Economic Theories ◽  
Economic Development And Growth ◽  
Formal And Informal Institutions

- The aim of this essay is the ‘triangular theory of social interactions as expounded by Kenneth Boulding. Rediscovering the theoretical reflections of Kenneth Boulding about social interactions is even more important nowadays when economists are emphasizing the role of both formal and informal institutions in economic development and growth. In fact, he pioneered the study of elements which are commonly considered in the economic theories of institutions, social capital, reciprocity and relational goods.

scholarly journals THE INFLUENCE OF INSTITUTIONS ON THE DYNAMICS OF POSTSOCIALIST TRANSFORMATION PROCESSES IN UKRAINE

2021 ◽  
Vol 4 (39) ◽  
pp. 512-520
Author(s):  
E. Moroz
Keyword(s):  
Economic Development ◽  
Informal Institutions ◽  
Jel Classification ◽  
Economic Transformation ◽  
Western Countries ◽  
Property Relations ◽  
Formal And Informal Institutions ◽  
Effective System ◽  
Transformation Processes

Abstract. Attention is paid to the important role of an effective system of institutions to ensure the economic development of Ukraine. It is noted that the formation of this system should be given the attention of scientists, as well as government agencies. The content of economic transformation of postsocialist countries, in particular Ukraine, is studied. The study was conducted using the methodology of comparing the capitalist and socialist systems, as well as the historical approach. The content of categories «property» and «transformation» is considered, as well as the influence of property institutions on the dynamics of transformation processes that took place in postsocialist countries. The interrelation and interdependence between the influence of institutions and the dynamics of the process of postsocialist transformation are determined. Results of the study showed a low level of development of formal institutions in Ukraine, while informal institutions act as a natural brake on further economic development. It is emphasized that the influence of institutions on the dynamics of postsocialist transformation processes is essential and crucial in Ukraine. Based on the institution of ownership, the effects of ownership are considered. Western countries are able to generate capital and maximize the benefits of using property due to their full use. Unlike Western countries, in Ukraine property is considered on the basis of the object, and not through a system of rights that can be used by the owner. The nature of legal and illegal property relations, as well as the preconditions for the transformation of property institutions, are considered in detail. The influence of formal and informal institutions on the dynamics of postsocialist transformation processes in Ukraine is determined. The emergence of intangible property by example of intellectual property, as well as the importance of compliance and implementation of property rights by the legislative system are considered. Conclusions are made about the current situation of the socio-economic system of Ukraine in the context of the transformation of formal and informal institutions. Keywords: institute, property, transformation, capital, entrepreneurship. JEL Classification P31 Formulas: 0; fig.: 0; tabl.: 1; bibl.: 15.

scholarly journals Entrepreneurship and Intrapreneurship in Social, Sustainable, and Economic Development: Opportunities and Challenges for Future Research

2020 ◽  
Vol 12 (21) ◽  
pp. 8958
Author(s):  
Sebastian Aparicio ◽  
Andreu Turro ◽  
Maria Noguera
Keyword(s):  
Economic Development ◽  
Social Change ◽  
Informal Institutions ◽  
Social Progress ◽  
Future Research ◽  
Special Issue ◽  
Formal And Informal Institutions ◽  
Development Institutions ◽  
Simultaneous Process

Understanding entrepreneurship and intrapreneurship as engines of outcomes beyond economic terms, this paper introduces the Special Issue “Entrepreneurship and intrapreneurship in social, sustainable, and economic development”. Institutions set the basis to analyze the role societies and organizations play in supporting entrepreneurial and intrapreneurial activity. Thus, we take a broad look at formal and informal institutions as those contextual components that are encompassed in a social progress orientation. Based on this, we discuss and provide examples about how entrepreneurship and intrapreneurship lead social, sustainable, and economic outcomes. Thus, in this paper and this Issue, we argue that it is necessary to consider those (institutional) antecedents and (developmental) consequences of entrepreneurship and its diversity as a simultaneous process. In addition to summarizing the main contributions of those articles contained in this Issue, we highlight some opportunities and challenges to further explore the role of entrepreneurship and intrapreneurship not only in economic development but also in social change and sustainability.

scholarly journals Cross-country start-up rates and formal incentives: a moderated mediation model of economic development and societal legitimacy

2019 ◽  
Vol 17 (1) ◽  
pp. 297-312
Author(s):  
Colin D. Reddy
Keyword(s):  
Economic Development ◽  
New Technology ◽  
Informal Institutions ◽  
Entrepreneurial Activity ◽  
World Bank Group ◽  
Moderated Mediation Model ◽  
Start Up ◽  
Formal And Informal Institutions ◽  
Market Opportunities ◽  
Bank Group

Though current research identifies which institutions are important as boundary conditions for entrepreneurship, questions remain about how they actually influence national entrepreneurial activity, particularly through start-ups. Specifically, the authors attempt to answer the following question: How do formal incentives influence the start-up rates across countries? Through a conceptual framework where formal incentives and societal legitimacy represent formal and informal institutions, respectively, the authors contribute to existing knowledge about national start-up activity by showing both the mechanism and conditions under which formal incentives increase the start-up rate. First, it is argued that formal incentives influence the start-up rate indirectly through the market opportunities available through economic development. Second, it is argued that these formal and informal institutions substitute for one another. The arguments are confirmed with a panel dataset on 57 countries from the World Bank Group Entrepreneurship Surveys and Global Entrepreneurship Monitor. A key implication of the findings is that early efforts at stimulating economic development, for example, by incentivizing foreign investments in new technology, can also kickstart the entrepreneurial activity as much as entrepreneurial activity also contributes to economic development in return.

Reducing Poverty and Sustaining Growth

2019 ◽  
pp. 773-792
Author(s):  
Nabila Nisha ◽  
Afrin Rifat
Keyword(s):  
Economic Development ◽  
Developing Country ◽  
Financial Institutions ◽  
Low Income ◽  
Financial Services ◽  
Microfinance Institutions ◽  
Intense Competition ◽  
Development Approach ◽  
Operational Structure ◽  
Micro Credit

Microfinance institutions have been effective rural banking channels that extended financial services to low-income individuals, particularly women in developing country settings. Since its inception, microfinance has evolved as an economic development approach and has grown to enormous scale in Bangladesh, with a reported approximate 23 million borrowers in a country of roughly 150 million people. These numbers reveal the highest population saturation of microfinance in any country. However, with the maturity of the microfinance market in recent years, competition has subsequently increased among various financial and non-financial institutions. Against this backdrop of intense competition, this chapter aims to focus on the current institutions of Bangladesh that has made the microfinance service almost a sole option for the downtrodden segment of the low-income society. In particular, various approaches of microfinance and its operational structure by these institutions including the challenges and attributions of a dynamic micro credit concept will be highlighted.

National culture, institutions and economic growth

2015 ◽  
Vol 4 (3) ◽  
pp. 331-351 ◽  
Author(s):  
Nataliia Ostapenko
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
National Economy ◽  
National Level ◽  
Informal Institutions ◽  
Cultural Dimensions ◽  
Causal Relationships ◽  
Content Type ◽  
Formal And Informal Institutions ◽  
Using Data

Purpose – The purpose of this paper is to examine the potential pathway of influence of formal and informal institutions and economic development on the business productive behaviour at the national level. Design/methodology/approach – In the paper SEM models and regression analysis are used to define the causal relationships. Using data from cultural dimensions of Hofstede, Inglehart and Tabellini, proxies for formal institutions and economic development this research empirically examines the way of influence of these factors on entrepreneurship performance in the national economy. Findings – This paper demonstrates that, stimulating by the economic growth, formal and informal institutions could affect business productive behaviour at the macro level in both direct and indirect ways through each other. Formal and informal institutions were found to act as substitutes. The author argues that the decision to act productively is not just a result of the formal institutional framework – “bad” outcomes of business development may also be a consequence of the activity of certain informal institutions as well as caused by poor levels of national economic development. Practical implications – Based on the findings of this research it is possible to improve the methods of formation of stimulation policy for driving business behaviour in a productive way by taking into account existing formal and informal institutions and the level of development of the national economy. Originality/value – This paper by using SEM techniques examines the causal relationships between the quality of formal and informal institutions and productivity of entrepreneurs at the national level.

Reducing Poverty and Sustaining Growth

2017 ◽  
pp. 50-75 ◽  
Author(s):  
Nabila Nisha ◽  
Afrin Rifat
Keyword(s):  
Economic Development ◽  
Developing Country ◽  
Financial Institutions ◽  
Low Income ◽  
Financial Services ◽  
Microfinance Institutions ◽  
Intense Competition ◽  
Development Approach ◽  
Operational Structure ◽  
Micro Credit

Microfinance institutions have been effective rural banking channels that extended financial services to low-income individuals, particularly women in developing country settings. Since its inception, microfinance has evolved as an economic development approach and has grown to enormous scale in Bangladesh, with a reported approximate 23 million borrowers in a country of roughly 150 million people. These numbers reveal the highest population saturation of microfinance in any country. However, with the maturity of the microfinance market in recent years, competition has subsequently increased among various financial and non-financial institutions. Against this backdrop of intense competition, this chapter aims to focus on the current institutions of Bangladesh that has made the microfinance service almost a sole option for the downtrodden segment of the low-income society. In particular, various approaches of microfinance and its operational structure by these institutions including the challenges and attributions of a dynamic micro credit concept will be highlighted.

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