TITLE:
A Literature Review on Institutional Change and Entrepreneurship
AUTHORS:
Jin Tao
KEYWORDS:
Institutional Economics, Institutional Change, Entrepreneurship
JOURNAL NAME:
Open Journal of Business and Management,
Vol.4 No.4,
August
30,
2016
ABSTRACT: The literature argues that what is an institution, how institution changes, and the relationship
between institutional change and entrepreneurship. I argue that institution
is not only the rule in a hierarchical order, but also a rule as something spontaneously
and endogenously shaped and sustained in the repeated operational plays of
the game itself [1]. Culture and meaning are important in the definition of institution.
An institution conceptualized is essentially endogenous, but appears to be an
exogenous constraint to the individual agents [2]. Paths of in institutional change
have two ways: Demand Induced Change—Bottom-up Change or Supply Induced
Changes: Change from above and from outside. Entrepreneurship does an important
role during institutional change. Most of researches about the relationship of entrepreneurship
and institutional change are how nation’s institution or economic policy
influence entrepreneurship, and how entrepreneurs’ actives make the economy successful
or unsuccessful. I argue that entrepreneurship is not only concerned with
business success, as measured by profits, but also with subjective welfare and noneconomic
wellbeing. Entrepreneurship is a catalyst for structural change and institutional
evolution. Evasive entrepreneurs could be viewed as a new rule-breaker. In
most theories of institutions and entrepreneurship, causality is understood to run
from institutions to entrepreneurship [3].