Corruption’s Impacts on Entrepreneurial Rates and Entrepreneurial Outcomes: The Moderating Role of Collectivism

Abstract To what extent do collectivist values constitute a force capable of altering corruption’s detrimental effects on entrepreneurial rates and entrepreneurial outcomes? This study challenges the universalistic view of institutional effects and institutional voids and argues that their impact on entrepreneurship hinges on cultural context. We theorize that collectivism explains the inconsistent effects of corruption on both entrepreneurial rates and entrepreneurial outcomes—entrepreneurship’s impacts on a nation’s economy. Using a longitudinal cross-lagged panel design across 104 countries from 2006 to 2020, we reveal collectivism’s dual role. Collectivism affects corruption’s impacts on entrepreneurial rates in an inverted U-shaped pattern, as countries with a balanced individualism-collectivism are the least affected. Alternatively, corruption’s negative impacts on entrepreneurial outcomes are increasingly minimized with higher levels of collectivism. By reframing corruption as a culturally embedded resource, not merely a barrier, this study contributes to international entrepreneurship research and practice. It urges future research, policies, and entrepreneurship training programs to move beyond a universalistic view of institutional effects and to tailor strategies focused on leveraging local cultural dynamics for entrepreneurial success.