Institutional Influence on Entrepreneurial Alertness and Business Growth in an Emerging Market Context

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Boris Urban

Abstract

Prior research acknowledges that successful entrepreneurs may be better at discovering opportunities embedded in the environment as their alertness allows them to spot high-potential opportunities. This paper investigates how entrepreneurial alertness may influence business growth while recognising the potential moderating influence of the institutional environment on this relationship. Regression models with moderation effects are tested using survey data from 120 small businesses in South Africa. Entrepreneurial alertness explains a significant amount of variance in small business growth, while the regulatory and normative institutional dimensions positively moderate this relationship. The results demonstrate that alert entrepreneurs assess their environments to grow their small businesses as moderated by their institutional environmental perceptions. Implications relate to educational training programmes that need to be developed to improve levels of entrepreneurial alertness in individuals. Considering there is a limited understanding of the relationship between alertness, institutions and business growth in emerging markets, empirical research of this nature is valuable as entrepreneurial behaviour needs to be explained in the context in which it occurs and institutional environments are a highly suitable form of analysis.

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