Abstract:

The purpose of this study is to understand the role of institutions on the relationship between national culture and entrepreneurship as an indicator of economic development. The research hypothesis is; the increase of entrepreneurship in cultures with low power distance and individualism is more likely through the institutional quality in the country. The conceptual underpinning of this premise is the expectation that entrepreneurial attitudes, abilities, and aspirations will be stronger in more egalitarian and individualistic societies where business is regulated by formal mechanisms such as property rights, contract law, and competition law, rather than by personal relationships. After analyzing 85 country-level data compiled from secondary sources, it was revealed that the level of entrepreneurship increases as the institutional quality improves in cultures with low power distance and high individualism. This finding is important because it emphasizes that a new perspective is required to develop policies for promoting entrepreneurship in collectivist cultures with high power distance.

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