The Relationship between Institutional Environments and Entrepreneurial Intention in Estonia: Mediating Roles of Desirability and Feasibility

Objective: The objective of the article is to examine the influence of institutional environment on potential future entrepreneurs and the mediating role of perceived desirability and feasibility. Research Design & Methods: On the basis of institutional theory, we applied structural equation modelling to test a model of the relationship between three dimensions of institutional environment (regulatory, cognitive, and normative) and Estonian university students' entrepreneurial intentions through the mediating role of perceived feasibility and desirability. Hypotheses were proposed and evaluated using data obtained from a survey of 265 Estonian university students. Findings: Results suggest that each dimension of institutional environment plays a decisive role in Estonian university students' entrepreneurial intentions, except for cognitive dimension, which does not exhibit a significant effect on entrepreneurial intentions through perceived desirability. Implications & Recommendations: The results of this study elucidate university students' entrepreneurial intentions from an Estonian perspective. On the basis of our findings, policymakers and entrepreneurship researchers may better understand how to cultivate entrepreneurial endeavours to facilitate economic development. Contribution & Value Added: This study offers a direction for future investigation by underscoring the importance of cultural differences in determining the validity of institutional theory as a means of testing entrepreneurial intentions.