The Dissociative Effect of Corruption and Democracy on High-Tech Entrepreneurs versus Low-Tech Entrepreneurs

This article uses an original dataset of 102 countries which uniquely enable us to distinguish between high-tech and low-tech entrepreneurs to examine the dissociative interplay between corruption, democracy, and the two kinds of entrepreneurship. Existing literature has demonstrated that corruption can have detrimental effects on entrepreneurial activity, as it decreases trust, increases uncertainty, and creates barriers to entry. In contrast, strong institutions that secure property rights and provide an efficient judicial system supposed to foster entrepreneurship by encouraging investment in new ventures. Democracy should also play a significant role in promoting entrepreneurship, as democratic societies offer access to institutions and resources that facilitate entrepreneurial activity, such as transparent legal systems and protection of property rights. Additionally, liberal values, which are often associated with democratic societies, create a diverse and dynamic culture that supports creativity, innovation, and entrepreneurship. In a novel theoretical contribution, this research claim that high-tech entrepreneurship is less influenced by local corruption and more dependent on other factors relate to democracy. Conversely, low-tech ventures tend to operate in local markets and are susceptible to the negative impact of local corruption, which can significantly increase the cost of doing business, while they are less inclined other parameters of democracy. This dissociation has significant policy implications and call for a proactive approach from the high-tech industry to combat corruption, as it can increase and eventually lead to anti-democratic changes that would in the longer term adversely affect the industry and the quality of life of those involved