A Theory of Entrepreneurship and Institutional Uncertainty
46 Pages Posted: 23 Jun 2017
Date Written: 2017
Uncertainty and institutions are each vital concepts in entrepreneurship research. However, little work has been done to combine them into a consistent conceptual framework for analyzing the dynamic aspects of entrepreneurial action, uncertainty, and institutional change. Using insights from new institutional economics, we develop a model that explains the institutional uncertainty resulting from conflicts between institutions on different “levels” of social activity. We further explain how entrepreneurs can both cause and mitigate this uncertainty through market and institutional action. Finally, we focus on a special case of institutional uncertainty, “regime uncertainty”, wherein entrepreneurs are left without reliable means to overcome uncertainty in political institutions.
Keywords: entrepreneurship, uncertainty, institutions, judgment, regime uncertainty
JEL Classification: D81, L26
Suggested Citation: Suggested Citation