The co-evolution of institutions and entrepreneurship

This article examines the interrelations of institutions and entrepreneurship to illustrate how they co-evolve. It takes the government, the public, and entrepreneurs as the actors of formal and informal institutions and entrepreneurship respectively. Then, drawing on several related theories and an inductive study on China’s institutional transitions, it develops a three-phase framework to analyze both actions of the government, the public, and entrepreneurs and their interactions in the process of institutional transitions. It indicates that such three actors act and interact differently at different stages of the transitions. This article provides a more comprehensive, dynamic picture on the interactions of institutions and entrepreneurship. In addition, it not only helps the government better transform institutions and foster the supply and allocation of entrepreneurship, but also aids entrepreneurs in interacting with the government and the public to exploit institutional transitions.