Institutional Quality and Entrepreneurship Development in Africa: New Evidence from Africa
DOI:
https://doi.org/10.31150/ajebm.v4i6.520Keywords:
Entrepreneurship, Institutional QualityAbstract
Extant literature depict institutional framework of a nation as main determinant of its entrepreneurial outcome. This study seeks to contribute to advancing institutional theory and its application in entrepreneurship. Specifically, the study answers the question “how does changes in institutional quality explain entrepreneurship in Africa. The study uses panel data from trusted secondary source like the UNDP, Transparency International, The Worldwide Governance Indicators (WGI) etc. The data is analysed using pooled OLS, Fixed effect. Our study revealed that 32% of the variations in entrepreneurship are caused by changes in institutional quality. Specifically corruption and absence of voice and accountability have negative and significant relationship with entrepreneurship.African countries need to improve on their legislation as a means of promoting entrepreneurship. Entrepreneurship will only flourish in a enabling environment of economic freedom.
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