Corruption and entrepreneurship in developed and emerging economies

The aim of this study was to clarify how entrepreneurship is affected at the individual level by corruption. To this end, we investigated how major corruption scandals impact entrepreneurs in developed and emerging economies. After observing what the literature says, we developed quantitative research with secondary data. We use individual-level data from the Global Entrepreneurship Monitor to study how entrepreneurs react to major corruption scandals in a developed and an emerging economy. Results indicate that for the developed economy, major corruption events have virtually no direct effect on entrepreneurs' decisions, and relations between entrepreneurs' perceptions and characteristics and entrepreneurial variables are stable. However, in the emerging economy, it has a severe negative direct impact on future intentions. It can change the relationship between several entrepreneurs' perceptions and characteristics and entrepreneurial variables, further impairing future intentions. The volatility we document in the weaker institutional environment is a novel result that may help conciliate conflicting results in the literature and expands the literature on moderating factors in entrepreneurship.