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Medientyp:
E-Artikel
Titel:
Knight, financial institutions, and entrepreneurship in developing economies
Beteiligte:
Nabisaalu, Joyce K.;
Bylund, Per L.
Erschienen:
Cambridge University Press (CUP), 2021
Erschienen in:Journal of Institutional Economics
Sprache:
Englisch
DOI:
10.1017/s1744137421000308
ISSN:
1744-1374;
1744-1382
Entstehung:
Anmerkungen:
Beschreibung:
<jats:title>Abstract</jats:title><jats:p>Financial institutions in developing economies fail to provide entrepreneurs with access to finance to grow their businesses. This severely hampers economic development in these countries. We seek to explain why and develop an argument and model based on Knight's theory, which we augment in two ways. First, by describing problems embedded in financial institutions of developing economies, for which we use the Schumpeterian view that creative destruction requires new credit to fund entrepreneurial disruption and de Soto's finding that undocumented assets possessed by entrepreneurs in developing economies cannot be leveraged as collateral to access finance. Second, we use Williamson's hierarchical institutional model to distinguish vertical interactions. The model is illustrated using the case of Uganda, a developing country in Eastern Africa. Our analysis finds that Uganda suffers from intertwined and misaligned formal and informal institutions, limited extent of codified property, and sparse access to finance. The findings prompt policymakers in developing economies to consider problems with and within financial institutions.</jats:p>