Institutional factors and operational performance in rural entrepreneurship: insights from areas affected by armed conflict

Purpose Rural areas can present unique challenges that make it difficult to understand the impact of institutional factors on rural entrepreneurship. This is especially true for rural areas affected by violent conflict. Therefore, this study aims to explore the impact of formal and informal institutional factors on the operational performance dimensions of rural businesses located in conflict-affected regions. Design/methodology/approach This research presents an empirical analysis based on data gathered from 288 rural ventures located in a conflict-ridden area. Confirmatory factor analysis and hierarchical regression analysis were used to test the research hypotheses. Findings Our findings show that informal institutional factors, such as self-efficacy in entrepreneurial skills and social networks and collaboration, have an impact on flexibility, delivery and production cost. On the other hand, formal institutional factors, such as capital access and education, have a positive effect on product quality and production cost. In addition, the moderating effect of armed conflict on the relationship between institutional factors and operational performance impacts both formal and informal factors. Originality/value This study examines how institutional factors affect the operational performance of rural ventures in regions affected by armed conflict. Unlike prior research focused on entrepreneurial intention or firm survival, it analyzes specific performance dimensions such as product quality, flexibility, delivery and production cost, offering a practical and underexplored perspective on entrepreneurship in fragile rural economies.