Abstract
There is increasing scholarly interest in informal entrepreneurship. We empirically examine how institutions interact to influence the informal entrepreneurship. Using a novel multi-source dataset we test institutional drivers of informal entrepreneurship in 28 innovation-driven countries during 2004-2011. Our results show that cognitive institutions inhibit informal entrepreneurship. Contrary to received wisdom in the literature, we find no relationship between regulatory institutions, normative institutions and the rate of informal entrepreneurship in innovation-driven countries. We find that regulatory institutions moderate the influence of cognitive institutions on informal entrepreneurship. Our study on informal entrepreneurship advances knowledge on heterogeneous entrepreneurial outcomes.
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