Abstract:
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.
