Extant literature about institutions and entrepreneurship has assumed that institutional factors are exogenous. Acknowledging that both institutions and entrepreneurial activity may be recursively linked, we attempt to overcome the endogeneity issue by examining the historical role in the relationship between informal institutions and regional entrepreneurship in a developing country (Antioquia, Colombia). Drawing on institutional economics, we hypothesize that informal institutions (i.e. entrepreneurial and business skills) are endured mechanisms enabling entrepreneurial activity. Based on a sample of 3557 individuals from the Global Entrepreneurship Monitor in 2012 and historical information about gold mining in the sixteenth century, we test a set of Probit models with instrumental variables. Our results show that the exploitation of gold mines and commercialization of gold in the sixteenth century explain the persistence of those institutions such as entrepreneurial and business skills influencing entrepreneurship nowadays. Theoretical and practical implications about the importance of historical events for entrepreneurship research are discussed.
Dr Sebastian Aparicio is an Assistant Professor in Entrepreneurship at Durham University Business School. He is also a Research Fellow at the Centre for University Entrepreneurship (Centre d'Iniciatives Emprenedores Universitàries –CIEU–, Universitat Autònoma de Barcelona –UAB). Sebastian's research focuses on the effects of entrepreneurial activity on economic growth and development under the institutional lenses, which has been published in outlets such as Technological Forecasting and Social Change, Small Business Economics, Journal of Evolutionary Economics, and Futures, among others.