The Effect of the Formal Institutional Environment on Entrepreneurial Intentions: The Case of Emerging Markets

Entrepreneurial Intentions (EI) form the basis of entrepreneurial behavior. Consequently, and in order to raise entrepreneurship levels in any environment, the desirability to launch start-ups must be stimulated. This thesis aims at investigating the effect of the formal institutional environment on entrepreneurial intentions (EI) in the context of emerging countries, using a panel data structure observation of 25 emerging economies classified by the MSCI and the IMF over the timeframe of five years from 2014 until 2018. One dependent variable (EI), six formal institutional explanatory variables and two macro-economic control variables were included in the study. Data analyses were carried out on Stata software, and the results revealed that three factors significantly influenced entrepreneurial intentions (EI) in the selected developing countries. Financing for Entrepreneurs and Governmental Policies and Support had a significant positive impact on EI, while Starting a Business had a significant negative impact on EI. Discussion of the results and the limitations of the study are included.