Moderating relationship of institutions for opportunity entrepreneurship and economic development : Literature review and proposed conceptual framework

Purpose The purpose of this paper is to develop a conceptual framework that illustrates how resource-based countries, such as those in the Gulf Cooperation Council, can move their economies towards a more sustainable diversified model, through creating and fostering institutions that are conducive for opportunity entrepreneurship. Design/methodology/approach Several key variables pertaining to formal and informal institutions which impact opportunity entrepreneurship are presented in a conceptual framework based on a comprehensive, non-systematic literature review. Findings Findings from the comprehensive literature review suggest that institutions play a moderating role between opportunity entrepreneurship and economic development. Institutions can stimulate entrepreneur’s behaviour leading to economic growth and subsequently development. Proposals worth pursuing in empirical studies in the future are presented based on the review of the literature. Practical implications This framework offers a model for oil-based countries in resolving structural problems in fostering entrepreneurship when responding to economic challenges. Originality/value The proposed framework in this study takes into consideration a comprehensive set of formal and informal institutional factors, rarely discussed in the existing literature, that link opportunity entrepreneurship and economic growth and development. Insights offered by this study have implications for government policy changes in developing effective institutions.