The Influence of Institutional Environment on New Venture Performance in Egypt: The Mediating Role of Social ties

Egyptian economy is characterised by an uncertain institutional environment. This environment presents various challenges to new ventures. A dynamic analysis of the extant literature shows that the effectiveness of the institutional environment in contributing to business performance is contingent on the entrepreneur’s social ties. Despite the importance of social ties, limited research has examined how the institutional environment interacts with the strength of entrepreneurs’ social ties to determine the success of new ventures in Egypt. Drawing upon institutional and social network theories, this research, therefore, investigates the impact of the institutional environment on new venture performance. It further examines the mediating role of entrepreneurs’ social ties within this relationship. This research utilises a mixed method approach. The data collection was performed in two sequential phases. The quantitative phase involved cross-sectional questionnaire data from 350 Egyptian entrepreneurs in the ICT industry. The qualitative phase of data collection comprised semi-structured interviews with 16 Egyptian entrepreneurs in the same industry. The quantitative and qualitative data are analysed using structural equation modeling (SEM) and thematic analysis, respectively. It is found from the quantitative data that social ties partially mediate the relationship between institutional environment – specifically its regulative and normative dimensions and the performance of new ventures. However, the qualitative findings found that social ties foster resilience and stability, helping entrepreneurs navigate Egypt’s challenging institutional environment and enhance performance. This suggests that social ties play a critical role as an institutional mechanism within this challenging context. This research contributes to the body of knowledge in two ways. Firstly, it contributes to the literature on the intricate interplay between the institutional environment and strength of entrepreneurs’ social ties in the performance of new ventures. Secondly, it shows the importance of social interactions as an enabler of innovation. Finally, this research informs practitioners and policymakers on how to support organisations, incubators, funding agencies, capacity-building programs by leveraging and capitalising on social ties for entrepreneurial survival and growth.

Name dc:type.qualificationname

PhD

Level dc:type.qualificationlevel

Doctoral

Grantor dc:publisher.institution

De Montfort University

Year dc:date.issued

2024

Author dc:creator

• Allam, Mirna Hassan

Licence

• https://dora.dmu.ac.uk/bitstreams/ae85fce8-3186-4a56-a906-69f0df96f4ee/download