Foundations and Trends® in Entrepreneurship > Vol 5 > Issue 3

Context Matters: Institutions and Entrepreneurship

By Peter J. Boettke, Department of Economics, George Mason University, | Christopher J. Coyne, Department of Economics, West Virginia University,

Suggested Citation
Peter J. Boettke and Christopher J. Coyne (2009), "Context Matters: Institutions and Entrepreneurship", Foundations and Trends® in Entrepreneurship: Vol. 5: No. 3, pp 135-209.

Publication Date: 11 Mar 2009
© 2009 P. J. Boettke and C. J. Coyne
Business formation
Institutional economicsSocial entrepreneurshipPolitical entrepreneurshipEntrepreneurshipInstitutional economicsAustrian economics

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In this article:
1 Introduction 
2 What Are Institutions? 
3 How Institutions Matter for Economic Outcomes 
4 Social Entrepreneurship 
5 Political Entrepreneurship 
6 Institutional Entrepreneurship 
7 Conclusion — Areas for Future Research 


This survey explores the important connection between institutions and entrepreneurship. Institutions consist of the formal and informal "rules of the game." Entrepreneurs act within a context determined by these rules. The rules of the game create payoffs that make certain entrepreneurial opportunities more attractive than others. We explore the relevant literature from institutional economics and entrepreneurial studies, focusing on the important link between the two. Particular emphasis is placed on entrepreneurship within several different institutional settings — private for-profit, private nonprofit, and political — as well as the impact of entrepreneurship on institutions. We conclude by discussing the implications for future research on the topic.

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Table of contents:
1. Introduction
2. What Are Institutions?
3. How Institutions Matter For Economic Outcomes
4. Social Entrepreneurship
5. Political Entrepreneurship
6. Institutional Entrepreneurship
7. Conclusion
8. References

Context Matters

Context Matters: Institutions and Entrepreneurship analyzes the connection between entrepreneurship and institutions. The goal is to provide a discussion of the literature on institutions in economics, develop the argument on the relationship between institutions and entrepreneurship and apply this logic to a variety of entrepreneurial settings - private for-profit, private non-profit and political. In addition to exploring entrepreneurship within several institutional settings, the authors also consider entrepreneurship on institutional arrangements. Context Matters: Institutions and Entrepreneurship develops the notion of institutions and provide insight into what this concept entails. The authors show how institutions matter for entrepreneurship and economic development. This if followed by a consideration of 'social entrepreneurship', 'political entrepreneurship', and the role of 'institutional entrepreneurs' and their impact on the formation and evolution of institutions. The authors end with a discussion of the implications for future research.