Regulatory institutions and cross-country differences in high-growth entrepreneurship rates: A configurational approach

Abstract

Regulatory institutions are double-edged swords: stricter regulations can improve entrepreneurs' access to key resources but also constrain their discretion. Past research has focused on the individual and/or independent influence of regulatory institutions, calling for stricter regulation or deregulation. However, institutional theory suggests that the full configuration of regulatory institutions, including their possibly complex interactions, drives the trade-off between resource access and the constraints imposed by resource providers. Using an inductive approach and fsQCA analysis, we aim to better understand how configurations of regulatory institutions and contextual conditions influence high-growth entrepreneurship (HGE) rates across European countries. We find that three distinct configurations explain high country-level HGE rates, which include different regulatory institutions that sometimes work in opposing ways and do not necessarily work universally across contexts. Overall, this study deepens research at the nexus of institutional theory and high-growth entrepreneurship.