ENTREPRENEURIAL ACTIVITY IN THE GULF COUNTRIES: AN INSTITUTIONAL APPROACH

Abstract

Over the contemporary years, multiple nations in the Middle East, notably the Gulf Cooperation Council (GCC) countries, with a particular focus on the Kingdom of Saudi Arabia (KSA), have started significant economic transformations, implementing reforms concentrated on entrepreneurship, innovation, and research. Entrepreneurship is a critical economic catalyst that the KSA government has integrated into its extensive economic planning. Thus, researchers and policymakers have demonstrated particular interest in comprehending this phenomenon. The primary purpose of this research is to explore how the institutional environment affects entrepreneurial activity in Saudi Arabia. The methodology applied uses mixed methods, quantitative and qualitative. The quantitative research is based mainly on Global Entrepreneurship Monitor (GEM) data. These data are complemented with other sources of information, such as the International Monetary Fund (IMF) and the Doing Business project database. The statistical technique used in the thesis is logistic regression. The qualitative method involved a systematic literature review and in-depth semi-structured interviews. The articles selected for inclusion in the systematic literature review were identified based on their presence in the Web of Science database's Social Sciences Citation Index (SSCI). The primary source of information for the interviewees was the Saudi Arabia Chambers of Commerce. Furthermore, this research draws upon two distinct theoretical frameworks: Institutional Theory and Human Capital Theory. This research's main findings illustrate how different institutional factors (formal and informal) influence entrepreneurial activities in the GCC, particularly in Saudi Arabia. The institutional environment plays a significant role in shaping entrepreneurial activities in this region, which is characterized by heavy dependence on a single source of income. Additionally, these findings underline how these factors restrict or provide entrepreneurs with opportunities. This thesis contributes to the existing literature by investigating understudied factors within the field, potentially advancing Institutional and Human Capital Theory. Examining the interplay between institutional factors and entrepreneurship in the GCC, particularly in Saudi Arabia, provides valuable understanding to enhance existing frameworks and stimulate further academic exploration. The findings guide policymakers and entrepreneurs, informing strategies to boost regional entrepreneurial growth.