On the Institutional Foundations of the Varieties of Entrepreneurship in Europe

Abstract

For decades, research into the link between national institutions and entrepreneurship has been characterized by three shortcomings: First, clear-cut concepts of institutions are rare. Second, a parsimonious understanding of how a few core institutions influence entrepreneurship is missing. Third, scholars often ignore that incrementally innovative ventures constitute a distinct (and under-researched) type of entrepreneurship next to the (over-researched) form of radically innovative, high-growth or high-tech entrepreneurship. This chapter seeks to illustrate how the application of the “Varieties-of-Capitalism” (VoC) reasoning does not only enable focused rather than eclectic analyses of institutional influences on entrepreneurship but also reveals the institutionally induced equifinality of the varieties of entrepreneurship across Europe. These insights invite future entrepreneurship research to move away from the ideology that displays radically innovative entrepreneurship as, by far, the most desirable form of entrepreneurship. This finding also invites policymakers to target entrepreneurial support measures more specifically to their economy’s institutional environment.