scholarly journals Tax morale and institutional theory: a systematic review

2018 ◽  
Vol 38 (9/10) ◽  
pp. 868-886 ◽  
Author(s):  
Ioana Alexandra Horodnic
Keyword(s):  
Systematic Review ◽  
Institutional Theory ◽  
Informal Institutions ◽  
Tax Morale ◽  
Content Type ◽  
Explanatory Variables ◽  
Formal And Informal Institutions ◽  
Nuanced Understanding ◽  
Salient Factor ◽  
Library Catalogue

PurposeThe purpose of this paper is to conduct a systematic review of the factors that shape tax morale. A large range of random explanatory variables identified in the literature as determinants of tax morale are synthesised and structured by drawing inspiration from the institutional theory.Design/methodology/approachTo do this, a systematic search has been conducted using a library catalogue which provides access to more than 400 databases.FindingsThe finding is that the institutional theory provides a suitable theoretical basis to explore tax morale. Indeed, all the factors until now identified as determinants of tax morale (except the control variables/socio-demographic characteristics) can be categorised either as belonging to formal institutions or to informal institutions. The most salient factor is trust, with both vertical and horizontal trust positively related to tax morale.Research limitations/implicationsThe outcome is a call for a more nuanced understanding of not only the effect of formal and informal institutions on tax morale but also how formal and informal institutions interact and alter each other and, consequently, affect tax morale.Practical implicationsThe paper seeks to encourage governments to start recognising that as low tax morale arises when a gap exists between formal and informal institutions, they need to design policy measures aimed to reduce this gap, rather than persisting with deterrence measures.Originality/valueThis is the first systematic review of the factors that influence tax morale using an institutionalist lens.

scholarly journals Formal institutions and the development of entrepreneurial activity – the contingent role of corruption in emerging economies

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Arezou Harraf ◽  
Hasan Ghura ◽  
Allam Hamdan ◽  
Xiaoqing Li
Keyword(s):  
Emerging Economies ◽  
Corporate Entrepreneurship ◽  
Informal Institutions ◽  
Entrepreneurial Activity ◽  
Future Research ◽  
Formal Institutions ◽  
Business World ◽  
Content Type ◽  
Formal And Informal Institutions ◽  
Control Of Corruption

PurposeThe paper aims to analyse the interplay between formal and informal institutions' and their impact on entrepreneurship rates in emerging economies.Design/methodology/approachThis study expands previous research in examining the moderating effect of control of corruption on the relationship between formal institutions and the development of the entrepreneurial activity. The study utilizes longitudinal analyses of a dataset from 41 emerging economies over 11 years (2006–2016).FindingsFindings provided robust support for the study's hypotheses. The results suggested lower levels of corruption positively moderate the effects of a country's number of procedures and education and training on the rates of entrepreneurial activity, while negatively moderating the effects of firm-level technology absorption on the rates of entrepreneurial activity.Research limitations/implicationsThe study has considered only one particular aspect of high-growth entrepreneurship, which is newly registered firms with limited liability. Although newly registered firms are recognized as one of the critical drivers of entrepreneurial activity. Future research should seek to examine other aspects of growth-oriented entrepreneurship such as activities involving a high level of innovation, corporate entrepreneurship or technology developments.Practical implicationsThis study advanced the existing theories in the field of entrepreneurship and institutional economics as it merged the two theories as a driving framework in the design of the study in the context of emerging economies.Social implicationsThe study tested a theoretical model by expanding the number of emerging economies in the study and found comparable findings that explain factors that may influence the likelihood of individuals entering entrepreneurship.Originality/valueThis article adds to the current literature as it highlights the importance of the interplay of formal and informal institutions in determining their impact on entrepreneurship rates in emerging economies. This is of particular importance to policy-makers, and the business world as the empirical results of this study show the benefits of control of corruption in boosting entrepreneurial rates in these economies, which strive for economic diversification in their developmental endeavours.

The Influence of Formal and Informal Institutional Voids on Entrepreneurship

2019 ◽  
Vol 44 (3) ◽  
pp. 504-526 ◽  
Author(s):  
Justin W. Webb ◽  
Theodore A. Khoury ◽  
Michael A. Hitt
Keyword(s):  
Institutional Theory ◽  
Informal Institutions ◽  
Entrepreneurial Activity ◽  
Institutional Voids ◽  
Entrepreneurial Behavior ◽  
Formal And Informal Institutions ◽  
New Space ◽  
Entrepreneurial Activities

Building new space for institutional theory, we propose how the severity of formal and informal institutional voids shapes the productivity of entrepreneurial activities within society. Our theory makes the key assumptions that voids can exist in both formal and informal institutions and that they are capable of hindering entrepreneurial behavior that is favorable to development progress. We extend new theoretical domains by conceptualizing informal institutional voids and proposing how both formal and informal institutional voids and their interaction influence two qualitative outcomes within localities: (1) the unique forms of entrepreneurial activity, and (2) the objectives underlying this entrepreneurial activity.

Network centrality and innovation performance: the role of formal and informal institutions in emerging economies

2019 ◽  
Vol 34 (6) ◽  
pp. 1388-1400 ◽  
Author(s):  
Haifeng Wang ◽  
Yapu Zhao ◽  
Beilei Dang ◽  
Pengfei Han ◽  
Xin Shi
Keyword(s):  
Social Cohesion ◽  
Emerging Economies ◽  
Informal Institutions ◽  
Innovation Performance ◽  
Network Centrality ◽  
Entrepreneurial Firms ◽  
Content Type ◽  
Growth Enterprise Market ◽  
Formal And Informal Institutions ◽  
The Impact

Purpose The impact of network centrality on innovation performance is inconclusive. The purpose of this paper is to examine how formal and informal institutions affect the influence of network centrality on firms’ innovation performance in emerging economies by integrating social network theory and institutional theory. Design/methodology/approach Multisource and lagged data from 234 technology-based entrepreneurial firms listed on the Chinese Growth Enterprise Market were leveraged to test a proposed research model. Findings Results suggest that formal institutions (marketization) positively moderate the relationship between network centrality and innovation performance, whereas informal institutions (social cohesion) negatively moderate this relationship. Moreover, formal and informal institutions have a strong joint impact on such relationship, that is, the effect of network centrality on innovation performance is most positive when marketization is high and social cohesion is low. Originality/value This empirical research provides new insights into whether and how firms can grasp the innovation benefits of network centrality by exploring institutional contingencies. It further sheds on light the scope of the network centrality–innovation issue by extending its research context to Chinese entrepreneurial firms.

scholarly journals An Institutional Theory of Tax Non- Compliance in Bulgaria: a Tax Morale Approach

2020 ◽  
pp. 33-49 ◽  
Keyword(s):  
Institutional Theory ◽  
Firm Size ◽  
Representative Sample ◽  
Political Instability ◽  
Informal Institutions ◽  
Formal Institutions ◽  
Tax Morale ◽  
Economic Decision ◽  
Face To Face ◽  
Nationally Representative

To explain tax non-compliance, the dominant approach has been to view noncompliance as a rational economic decision taken when the benefits outweigh the costs. However, many remain compliant even when non-compliance is the rational economic decision. The outcome has been the emergence of a new tax morale approach. Grounded in institutional theory, this asserts that formal institutional failings lead to an asymmetry between the laws and regulations of a society’s formal institutions and the beliefs of the population that constitute its informal institutions. The greater is this asymmetry (measured by the level of tax morale), the greater is the prevalence of tax non-compliance. Until now, studies have analysed the tax morale of citizens. This paper evaluates the tax morale of entrepreneurs and identifies the formal institutional failings that lead to lower tax morale among entrepreneurs. Reporting 456 face-to-face interviews with a nationally representative sample of entrepreneurs in Bulgaria, it is revealed not only that the tax morale of entrepreneurs varies by sector and firm size, but also that the formal institutional failings significantly associated with low tax morale include a perceived lack of tax fairness, corruption and political instability. The implications for theory and policy are then discussed.

EVALUATING THE DETERMINANTS OF FORMAL ENTREPRENEURSHIP: AN INSTITUTIONAL ASYMMETRY PERSPECTIVE

2021 ◽  
pp. 2150006
Author(s):  
HABIB UR REHMAN MAKHDOOM ◽  
CAI LI ◽  
SHOAIB ASIM ◽  
MAJID MURAD
Keyword(s):  
Social Capital ◽  
Informal Institutions ◽  
Negative Influence ◽  
Individual Level ◽  
Explanatory Variables ◽  
Interaction Terms ◽  
Formal And Informal Institutions ◽  
Proxy Measure ◽  
Negative Effect ◽  
Entry Regulations

Our study explores the effect of institutions in determining the prevalence of formal entrepreneurship and investigates the entrepreneurial choice in response to these institutions. To pursue the objectives of the study, we utilized eleven years of data from 23 countries of the Asian region. As explanatory variables, entry regulations were taken as a proxy measure of formal institutions; whereas, social capital was considered a proxy measure of informal institutions. Based on the nature of data, we applied a pooled OLS regression model to examine the influence of explanatory variables on the entrepreneurial choice. The findings proclaimed that at an individual level, both formal and informal institutions have a negative effect on entry into formal entrepreneurship. Further, the estimations of the interaction terms revealed the existence of asymmetry between formal and informal institutions regarding that negative influence on entry into formal entrepreneurship.

Knowledge spillover driven by institutions: evidence from the big science project in China

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lingling Zhang ◽  
Chang Gao ◽  
Yoshiteru Nakamori
Keyword(s):  
Knowledge Spillovers ◽  
Informal Institutions ◽  
Knowledge Spillover ◽  
Individual Behavior ◽  
Engineering Practice ◽  
Big Science ◽  
Formal Institutions ◽  
Institutional Perspective ◽  
Content Type ◽  
Formal And Informal Institutions

Purpose This study aims to explore the knowledge spillover mechanism in big science projects (BSP) from an institutional perspective by elaborating on the dynamic relationship between institutional dualism and legitimacy. Design/methodology/approach The study conducts an exploratory research and adopts the grounded theory methodology in the context of BSP. Data draw mainly upon nine semi-structured interviews. Findings The knowledge spillovers in BSP are driven by institutions, which work through mechanisms of legitimacy perception. Formal and informal institutions influence organizational and individual behavior through legitimacy pressure and support. Formal institutions impose legitimacy pressure on organizations and individuals, forcing them to cooperate closely to solve problems; informal institutions enable them to adopt innovative strategies and positive attitudes through legitimacy support; all these promote knowledge spillovers in research and development (R&D) activities, engineering practice and regional interaction. Knowledge spillovers enable stakeholders to realize their R&D advancement, manufacturing promotion and management sophistication. Further, regional knowledge diffusion and culture transmission promote regional innovation and social capital accumulation. Research limitations/implications The study develops a theoretical model that shows how knowledge spillover mechanisms happen in BSP from an institutional perspective (the trigger, the channels/process and the impacts). More specifically, this explanation is provided by explaining how formal and informal institutions influence organizational and individual behavior through legitimacy perceptions. Practical implications First, policymakers should recognize and value the guiding, supporting and coordinating role of formal institutions and enrich capital forms to release the legitimacy pressure of stakeholders. Second, management of BSP needs to be capable of coordinating stakeholder relationships and interactions, while management should focus their attention on fostering good organizational routines and shared group value. Third, the local culture and customs should be taken into consideration since it can be an enabling or constraining of BSP. Finally, industries can take advantage of the opportunity to coordinate their R&D efforts to gain competitiveness. Originality/value First, the authors introduce the institutional perspective to analyze the construction process of BSP, which helps to better understand the interactions of stakeholders under the influence of institutions, the dynamic process and impacts of knowledge spillovers. Second, the authors are committed to contributing to the development of knowledge spillover theories by adopting an institutional perspective. The authors furthermore explore and propose the presence of a dynamic mechanism between institutional dualism and knowledge spillovers. In consequence, the authors introduce the concept of legitimacy perceptions, which is a bridge to understanding the interaction between them. Third, by explicitly discussing the actual meaning of our framework, the authors explore the unique potential of institutional arrangement in promoting the knowledge management of complex cross-border cooperation, while seeking to promote its management and administrative practices.

Institutional outlook of the entrepreneurial climate in Ghana

2015 ◽  
Vol 42 (6) ◽  
pp. 566-582 ◽  
Author(s):  
Samuel Adomako ◽  
Albert Danso ◽  
Ernest Ampadu
Keyword(s):  
Conceptual Framework ◽  
Empirical Studies ◽  
Informal Institutions ◽  
Cultural Factors ◽  
Entrepreneurial Activity ◽  
Major Influence ◽  
Content Type ◽  
Formal And Informal Institutions ◽  
Entrepreneurial Climate

Purpose – Previous scholarly studies on institutions tend to create a sombre picture of institutions by ignoring to examine the antecedents of formal and informal institutions. The purpose of this paper is to overcome this limitation by proposing a conceptual framework of the antecedents of formal and informal institutions of entrepreneurial climate in a less developed market setting. Design/methodology/approach – This study builds on a comprehensive survey of the literature on institutions by using a synthesis thematic methodology to identified key scholarly studies which have been published in previous theoretical and empirical studies and proposes a conceptual framework of the role of formal and informal institutions in defining entrepreneurial climate in a developing economy’s context. Findings – The findings of the paper suggest that political factors and economic factors define formal institutions whilst socio-cultural factors define informal institutions. These factors rooted in political, economic and socio-cultural factors have a major influence on the rate and nature of entrepreneurial activity in a developing country setting. Practical implications – This paper contributes to the literature on entrepreneurship and intuitional theory by focusing on the antecedents of formal and informal institutional factors that shape entrepreneurial climate in Ghana. Originality/value – To the authors’ knowledge, this is the first review that explores the nature of entrepreneurial climate and proposes a conceptual framework of the role of formal and informal institutions in defining entrepreneurial climate in Ghana.

scholarly journals Searching for a new perspective on institutional voids, networks and the internationalisation of SMEs in emerging economies: a systematic literature review

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ofer Dekel-Dachs ◽  
Marta Najda-Janoszka ◽  
Peter Stokes ◽  
Amon Simba ◽  
Shlomo Tarba
Keyword(s):  
Institutional Theory ◽  
International Marketing ◽  
Informal Institutions ◽  
Business Networks ◽  
Institutional Voids ◽  
Content Type ◽  
New Perspective ◽  
New Research ◽  
The Impact

PurposeThis study, a systematic review, focuses on the internationalisation of small and medium-sized enterprises (SMEs) originating in developing countries. It critically analyses, evaluates and synthesises studies featuring formal and informal institutions, embedded in social and business networks, as a marketing solution for institutional voids. The review shows that current international marketing studies downplay the role of informal institutions in the internationalisation of SMEs. Thus, the authors set a new research agenda for advancing the institutional theory to account for the impact of informal institutions and networks on firm internationalisation.Design/methodology/approachThis review followed five structured stages, including framing the research questions, identifying relevant studies, assessing their quality, summarising the evidence and interpreting the findings. Based on the systematic approach, 434 papers (374 from Web of Science, 60 from Scopus) were generated. Following that, the authors applied the qualitative inclusion/exclusion criteria, which yielded 63 papers. Their analysis involved three authors, with the fourth author focusing on ensuring quality in the analysis.FindingsThe study findings invite a different line of theorising market structures and processes focusing on the role of networks as an alternative to formal institutional systems. The outcome of our review suggests that there is scope for developing the institutional theory that account for the role of informal institutions and networks.Originality/valueBased on the analysis, we call for new theorisation, in the international marketing literature, which accounts for informal networking amongst internationalising SMEs in the light of institutional voids. Thus, the authors promote novel participatory, bottom to top understanding of relationship between institutions and enterprises.

Diversity, corporate governance and CSR reporting

2019 ◽  
Vol 30 (1) ◽  
pp. 116-136 ◽  
Author(s):  
Dina El-Bassiouny ◽  
Noha El-Bassiouny
Keyword(s):  
Corporate Governance ◽  
Institutional Theory ◽  
Governance Structure ◽  
Developed Countries ◽  
Organizational Level ◽  
Content Type ◽  
Explanatory Variables ◽  
Reporting Practices ◽  
Csr Reporting ◽  
The Usa

PurposeTaken from an institutional theory perspective, the purpose of this paper is to explore the effects of organizational-level factors, specifically diversity and corporate governance structure, on the corporate social responsibility (CSR) reporting practices of corporations operating in developing and developed country contexts, namely, Egypt, Germany and the USA. Since developed countries are exposed to different settings, the paper argues that there is likely to be a difference in the organizational-level drivers of CSR reporting in developed vs developing countries.Design/methodology/approachThe sample consists of companies listed on the Egyptian EGX 30 index, the German DAX 30 index and the US Dow Jones 30 index. Governance- and diversity-related data are gathered from multiple sources including the BoardEx and Orbis databases. Content analysis is used to analyze the CSR information of sample companies using the software package MAXQDA. To examine the relationship between the explanatory variables of the study and CSR disclosures, multiple regression analysis is used.FindingsThe results are mostly consistent with institutional theory where the effects of diversity and governance structure, observed mainly by foreign BOD, board independence and institutional ownership, are found to be significant on the CSR disclosure levels of sample Egyptian companies only. On the other hand, no significant influence of tested factors was observed on the level of CSR reporting in the USA and Germany. The results thus indicate that the influence of organizational-level factors on CSR is highly dependent on the institutional context where companies operate.Originality/valueThe influence of diversity and corporate governance on CSR has been separately studied in the management literature. Yet, the potential effects of both variables on CSR have received limited attention. In addition, no study combining such explanatory variables of CSR was carried out in the specific context of developing Middle Eastern countries. Also, illustrating how institutional contexts can influence the dynamics of interaction between organizational-level variables and CSR is still understudied. This kind of multi-level research can help broaden the understanding of the drivers and practices of CSR in developing vs developed countries that have distinct institutional environments.

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.

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