Addressed Gaps in the Literature
The article by Eijdenberg et al. (2019) aims to fill the gap in the literature concerned with entrepreneurs’ individual experiences and responses to institutional constraints to entrepreneurship. According to Eijdenberg et al. (2019), the existing literature on institutional constraints to entrepreneurship focuses on macro- and meso-levels, i.e., it analyzes the constraints at social and sector or community levels. The micro-level, i.e., individual behaviors and experiences, is not covered in the literature. Therefore, the authors addressed this gap to find out entrepreneurs’ day-to-day experiences regarding barriers and facilitators of entrepreneurship in a developing country.
Ideas and Arguments Found Stimulating
One stimulating idea is that the most frequent political constraint to entrepreneurship in a developing country is complicated bureaucracy, which includes bribery, licenses, and paying taxes. Eijdenberg et al. (2019) found that, in Tanzania, many documents and licenses should be obtained to register a business, and this process often involved giving bribes. It implies that the government’s inability to facilitate the procedure of starting a business and cope with bribery hinders its economic development. Another stimulating argument is that joining associations helps entrepreneurs cope with institutional constraints. When entrepreneurs cannot handle business issues themselves, they turn to informal networks to decide on a new location or discuss marketing efforts.
Questions and Concerns with the Main Claims
The main claim is that studying entrepreneurs’ personal stories is as important as exploring entrepreneurship at society and community levels. The authors’ questions are concerned with entrepreneurs’ experiences regarding institutional environments, the effect of various institutions on entrepreneurs, and entrepreneurs’ responses to institutional constraints in developing countries. Since the authors emphasize the importance of studying entrepreneurs’ individual experiences and responses, it may raise a question of how entrepreneurs’ responses contribute to change in the institutional environment. Research into this question would prove the importance of the topic and inform policymakers’ decisions.
Similarities or Disagreements Reported in The Literature
In this article, the authors contrast their research with the existing literature on the topic. The existing studies on the effects of institutional environments on entrepreneurship have similar features: they analyze institutional environments on macro- and meso-levels and are mostly focused on developed countries (Eijdenberg et al., 2019). Eijdenberg et al. (2019), on the contrary, focus on the micro-level and investigates institutional constraints in a developing country. The authors also note that, although most research recognizes economic, political, and cultural factors affecting entrepreneurial activity, it does not provide details related to local contexts or specific situations. In contrast, Eijdenberg et al. (2019) thoroughly analyze these factors in the context of a challenging institutional environment in Tanzania. Yet, the findings of the study by Eijdenberg et al. (2019) appear to be consistent with the results of the literature review. For example, common findings are that informal associations and relationships with key government officials help entrepreneurs cope with institutional constraints.
Future Research Directions
The article provides several directions for future research on the topic. Firstly, the authors suggest that future studies may focus on exploring entrepreneurial activity in difficult institutional environments, e.g., transition economies or newly-emerged countries. Secondly, scholars may conduct similar studies in Tanzania and neighboring countries using different research methods to deepen the understanding of the topic. Thirdly, Eijdenberg et al. (2019) argue that it would be reasonable to explore the extent to which language barriers and festivals affect entrepreneurship activity. Research in these directions would provide a more detailed overview of the effects of institutional environments on entrepreneurship.
A Recent Work Missing
In their study, Eijdenberg et al. (2019) discovered entrepreneurs’ responses to institutional constraints in Tanzania. There is another recent study focused on entrepreneurs’ responses in developing countries. Elert and Henrekson (2020) reviewed the literature on the topic of entrepreneurial responses and classified these responses into three categories: institution-abiding, institution-altering, and institution-evading. Responses in all three categories may be either productive, leading to positive changes in the institutional environment, or unproductive (Elert & Henrekson, 2020). For example, among entrepreneurs’ responses found by Eijdenberg et al. (2019), providing the market with high-quality and unique goods may be regarded as a productive response, while paying bribes is unproductive.
References
Eijdenberg, E. L., Thompson, N. A., Verduijn, K., & Essers, C. (2019). Entrepreneurial activities in a developing country: An institutional theory perspective.International Journal of Entrepreneurial Behavior & Research, 25(3), 414-432. Web.
Elert, N., & Henrekson, M. (2020). Entrepreneurship prompts institutional change in developing economies.The Review of Austrian Economics, 1-21. Web.