The influence of institutions on early-stage entrepreneurial activity: a comparison between men and women in Saudi Arabia

Abstract

PurposeTo date, insufficient research has been conducted on gender differences in entrepreneurial activity among entrepreneurs in developing countries. This study aims to analyse the influences of formal and informal institutional factors on entrepreneurial activity among men and women in the context of Saudi Arabia.Design/methodology/approachThis research involves a quantitative analysis of recently collected primary data. Hypotheses are formulated and tested using the Mann–Whitney U test and a binomial logistic regression analysis. Also, the present study draws on institutional economics as a framework to explore how formal and informal institutional factors influence whether Saudi Arabian men and women become entrepreneurs.FindingsThe results revealed that compared to the effects of formal institutional factors, the effects of informal institutional factors are more reliable predictors of women’s entrepreneurship behaviour. Specifically, women are more likely than men to be stereotyped and more likely to benefit from networking.Practical implicationsRegarding policy implications, this study suggests several checks for different institutions to increase entrepreneurship among each gender.Originality/valueThe findings presented here advance entrepreneurial research by empirically examining factors that influence men’s and women’s desires to become entrepreneurs in a fast-growing emerging economy. The findings show a substantial shift in the institutional environment and indicate an extremely collectivist society. This study provides a basis for future studies on factors within the institutional environment and their impacts on whether men and women become entrepreneurs in Eastern nations. Regarding policy implications, this study suggests several ways for different institutions to increase entrepreneurship among each gender.