The impact of institutional change on entrepreneurship in a crisis-hit economy: the case of Greece

Abstract

This paper examines how changes to the institutional environment in a crisis-hit economy impact on entrepreneurial activity. Through a case study of Greece, the paper demonstrates how the institutional environment has changed in light of the crisis and the resultant response of entrepreneurs to these changes. Drawing on in-depth interviews with entrepreneurs, the findings suggest that changes to institutions have served to limit entrepreneurial activity rather than enhance it, and that this has worsened in the midst of the crisis. We argue that this will detrimentally impact Greece's ability to navigate out of the crisis and regain competitiveness in the longer term. The paper concludes by offering a number of theoretical and policy implications which are focused on improving institutional environments so that entrepreneurship can play an appropriate role in recovering from economic crises.