Intergovernmental organizations and entrepreneurship: understanding the relationship between the supranational, national, and individual level

Abstract

Intergovernmental organizations (IGOs), such as the World Trade Organization, the United Nations Trade and Development and the World Bank, promote stability, security and development for member states and their citizens via supranational institutional influences. However, their influence on individuals, especially their entrepreneurial business activities, is unclear. As policymakers decide when more (or less) IGO involvement best serves their countries and citizens, we must better understand the connection of the supranational, national, and individual levels. Thus, we study how IGO membership influences entrepreneurial opportunities and focus on two activities that impact a country’s economy differently: formal and informal entrepreneurship. Moreover, we identify how national institutional ecologies build the bridge between the supranational and the individual level and mediate the relationships. Using a sample of 68 countries, their entrepreneurial environment, and their connection to IGOs, we find that IGO memberships enhance opportunities for entrepreneurship. Moreover, IGOs promote formal entrepreneurial activities while discouraging informal entrepreneurial activities, mediated by the country’s institutional ecology. We combine insights from international relations, institutional theory, and strategic entrepreneurship to highlight how institutions at different levels influence entrepreneurial opportunities and discuss the policy implications of our findings.