Supportive formal institutions, entrepreneurial learning, and new venture performance: a study from China's emerging economies

This study establishes a framework for examining the impact of macro-institutions on micro-entrepreneurial behaviour in emerging economies by integrating institutional theory with signal detection theory. We examine the effect of supportive formal institutions on new venture performance. Furthermore, we examine the mediating role of entrepreneurial learning and the moderating role of trust between the entrepreneurial team. Using China as a country representative of emerging economies, the empirical analysis results suggest that entrepreneurial learning (EL) plays a positive mediating role in the relationship between supportive formal institutions and new venture performance. Furthermore, it suggests that trust among the entrepreneurial team can strengthen the relationship between supportive formal institutions and new venture performance. The empirical results provide some insights into the effect of formal institutions and informal institutions (entrepreneurial team trust) on new venture performance, and they also have several implications for entrepreneurs in emerging economies to operate their new ventures.