TITLE:Institutional Fragility and Entrepreneurial Activities
ABSTRACT:Extensive research has shown that transition economies often experience internal friction, conflicts, and institutional fragilitywhen different institutional dimensions evolve at an uneven pace. However, limited knowledge exists regarding how institu-tional fragility specifically affects entrepreneurial activities. This study develops a theoretical framework that integrates insti-tutional theory and public choice theory to examine the impact of institutional fragility on entrepreneurship, considering bothinstitutional costs and government intervention. Our findings reveal an inverted U‐shaped relationship between institutionalfragility and entrepreneurial activity in China. Furthermore, we find that regional guanxi culture—a key informal institution inChina—mitigates this relationship. Overall, this study provides a novel perspective on institutional fragility, offering new in-sights into how the institutional environment shapes entrepreneurial activity in China.
KEYWORDS: China；entrepreneurial activity ；informal institution；institutional fragility
DOI: https://doi.org/10.1002/app5.70026
