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Evasive entrepreneurship: Circumventing and exploiting institutional impediments for new profit opportunity in an emerging market

Evasive entrepreneurship (circumvention and exploitation of institutions by entrepreneurs) is a prevalent practice in many developing economies. Extant literature on the topic falls short of providing adequate theories to explain its triggers, mechanisms, and consequences. Leveraging extensive surve...

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Detalles Bibliográficos
Autores principales: Ufere, Nnaoke, Gaskin, James
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Public Library of Science 2021
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7895365/
https://www.ncbi.nlm.nih.gov/pubmed/33606760
http://dx.doi.org/10.1371/journal.pone.0247012
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author Ufere, Nnaoke
Gaskin, James
author_facet Ufere, Nnaoke
Gaskin, James
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description Evasive entrepreneurship (circumvention and exploitation of institutions by entrepreneurs) is a prevalent practice in many developing economies. Extant literature on the topic falls short of providing adequate theories to explain its triggers, mechanisms, and consequences. Leveraging extensive survey data from the World Bank, we used structural equation modeling to examine the relationship between evasive entrepreneurial behavior—tax evasion and bribery—and the relative payoff of such practices. Of the 2599 Nigerian entrepreneurs in our sample, the majority admitted to engaging in evasive entrepreneurship. The data suggest that institutional factors thought to constrain entrepreneurship in emerging markets are counter-intuitively perceived by founders as opportunities to earn large rents and improve firm performance. Our results emphasize the urgent need to eliminate institutional constraints that paradoxically enable the growth of evasive entrepreneurship in emerging economies. Our results also suggest that prevailing local conventions involving evasive behavior may motivate nascent entrepreneurs to imitate bribery and tax evasion, normalizing malfeasance as ‘best practice.’
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spelling pubmed-78953652021-03-01 Evasive entrepreneurship: Circumventing and exploiting institutional impediments for new profit opportunity in an emerging market Ufere, Nnaoke Gaskin, James PLoS One Research Article Evasive entrepreneurship (circumvention and exploitation of institutions by entrepreneurs) is a prevalent practice in many developing economies. Extant literature on the topic falls short of providing adequate theories to explain its triggers, mechanisms, and consequences. Leveraging extensive survey data from the World Bank, we used structural equation modeling to examine the relationship between evasive entrepreneurial behavior—tax evasion and bribery—and the relative payoff of such practices. Of the 2599 Nigerian entrepreneurs in our sample, the majority admitted to engaging in evasive entrepreneurship. The data suggest that institutional factors thought to constrain entrepreneurship in emerging markets are counter-intuitively perceived by founders as opportunities to earn large rents and improve firm performance. Our results emphasize the urgent need to eliminate institutional constraints that paradoxically enable the growth of evasive entrepreneurship in emerging economies. Our results also suggest that prevailing local conventions involving evasive behavior may motivate nascent entrepreneurs to imitate bribery and tax evasion, normalizing malfeasance as ‘best practice.’ Public Library of Science 2021-02-19 /pmc/articles/PMC7895365/ /pubmed/33606760 http://dx.doi.org/10.1371/journal.pone.0247012 Text en © 2021 Ufere, Gaskin http://creativecommons.org/licenses/by/4.0/ This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
spellingShingle Research Article
Ufere, Nnaoke
Gaskin, James
Evasive entrepreneurship: Circumventing and exploiting institutional impediments for new profit opportunity in an emerging market
title Evasive entrepreneurship: Circumventing and exploiting institutional impediments for new profit opportunity in an emerging market
title_full Evasive entrepreneurship: Circumventing and exploiting institutional impediments for new profit opportunity in an emerging market
title_fullStr Evasive entrepreneurship: Circumventing and exploiting institutional impediments for new profit opportunity in an emerging market
title_full_unstemmed Evasive entrepreneurship: Circumventing and exploiting institutional impediments for new profit opportunity in an emerging market
title_short Evasive entrepreneurship: Circumventing and exploiting institutional impediments for new profit opportunity in an emerging market
title_sort evasive entrepreneurship: circumventing and exploiting institutional impediments for new profit opportunity in an emerging market
topic Research Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7895365/
https://www.ncbi.nlm.nih.gov/pubmed/33606760
http://dx.doi.org/10.1371/journal.pone.0247012
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