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Most nations acclaim their differences in economic development to their wealth in assets and security ownership, for instance, stocks. However, the focus of discussion should be on entrepreneurship. Even though not given much thought, entrepreneurial development could significantly contribute to a nation's economic advancement. Thus, a nation's institutions could spearhead its economic development through their impeccable market responsiveness and entrepreneurial success. However, such an advancement might be affected by several factors such as institutional, cultural, and psychological contexts of an institution. Generally, they have been known to affect entrepreneurs' processes and proclivities. Empirical testing has been performed to develop hypothetical theories about how certain institutional conditions affect the capacity of an individual to make certain independent choices. In addition, a hypothetical idea has been formed on the institutional conditions as being more convenient for group-oriented entrepreneurs. Lastly, it is argued that entrepreneurs' behavior is easily affected by the social environment. Researchers try to prove that entrepreneurial practices have blanket effects on the market structures, nature, and direction of economic activities. Some essential ideas are featured in this chapter include the following ones.

Personal Agency in Entrepreneurship

The hypothesis established is that economic policies constrain economic freedom to allay people's alertness to profit opportunities . There is no widely accepted scope for determining the strength of a person's disposition to be alert. If researchers are to find ways of measuring a person's degree of alertness to entrepreneurial opportunities, much more work is to be done. The inherent nature of entrepreneurial alertness dampens its ability to be empirically studied, and for this reason, the subject can be tested by discussions only. Two tests could be carried out to determine the propensity of entrepreneurs in highly regulated industries and those in less regulated industries. The first test would involve measuring the mean personal scores of both entrepreneurs and finding their important differences. The second criterion entails comparing mean LOC regarding self-efficacy and self-agency for entrepreneurs in the same industry before and after economic deregulation. An ANCOVA test to determine the entrepreneur's personal agency strength would be performed. One problem would arise since it will not be known how long it would take for the deregulatory measure to take effect on entrepreneurs due to the time that elapses as the bills pass through political debates and come into force on the economy.

Institutional Rules are More Applicable and Convenient for a Group-oriented Entrepreneurial Society

The argument given by Harper is that group orientation by no means rejects the fact that there is negative freedom, the rule of law, private property rights, and freedom of entrepreneurial rights. Most factors, such as property and contracts, are greatly associated with group membership. Thus, it follows that the term person has to be clearly defined beforehand. The unit of focus in team-oriented communities is the individual, so the relevant institutional rules must unleash the vigilance of a different type of body. Liberalism cannot be identified with a particular culture. Thus, the institutions of civil society are focused on non-coercive group norms. The perception of freedom under the law is instinctively social, and it can be defined only concerning interpersonal relationships. Private property is seen that it can be owned by an association of people and just by an individual. Legal rights grant persons in any culture the ability to own property.

Reciprocal Causation

It is agreeable that the feedback effects are likely to happen when personal understanding and entrepreneurial actions mesh to affect the cultural norms and institutions of society . Culture, traditions, and people's intellect can affect each other at different speeds.

Three Important Ideas Expressed in the Study

Personal Agency is Vital for Entrepreneurial Freedom

Personal agency generally refers to a person's ability to make independent decisions. To measure the mean personal agency scores of entrepreneurs, it would be paramount to control the aspect of culture. An individualist cultural setting would be preferable because measuring the firm beliefs of an individual's personal self is less complicated . First, to measure personal agency beliefs, it would be necessary to develop a sophisticated measuring scale, and the best choices would be Rotter's scale and Levensons three factor LOC scale. Measures of self-efficacy must also be determined as entrepreneurship poses unique problems because it encompasses interrelated tasks. Thus, it would be wise to develop an entrepreneurial self-efficacy construct that is in line with Chen. Once the scores of both tests have been obtained, the total measure of personal agency is found from the two measures initially determined. In the second test that determines the self-efficacy and personal agency of a sample of entrepreneurs in an industry before and after a major episode of economic deregulation, the same set of control variables would be included.

Applicability of Market-preserving Institutions Affects Entrepreneurial Abilities

Free trade and the concept of private property are as crucial as sustained economic prosperity. Studies have shown that without a functioning system of the private right of ownership in a particular country, entrepreneurial success and economic prosperity are highly unlikely. In Hong Kong and Singapore, society is mainly group-oriented but it supports free trade and private property rights . It is seen that both cities attribute their great per capita wealth to economic policies. Both have institutional, economic policies that secure free trade. Hong Kong has always been ranked as the city with the best institutional structures and as been closely followed by Singapore; both cities have always been leaders among world's most economic free places.

Triadic Reciprocal Causation Using data collected from the USA and Poland, Harper has discovered that economic conditions have contemporaneous effects on psychological functioning, while mental functioning also has slackening effects on technical conditions . People's cognitive functioning is more readily feasible to change and is quicker affected by occupational conditions. When it comes to the direction of causation, Gwartneys study on the effect of changes on economic freedom on economic growth has found a strongly positive correlation between the changes in economic freedom and economic growth. It has been discovered that the increases in economic freedom in a country generate higher rates of economic growth. The hypothesis that there exists a strong correlation between the two factors, such as economic freedom and economic growth, has been accepted because countries that grow faster tend to more economically flexible.

Relationship Between Entrepreneurial Success and Personal Agency

The first issue discussed in the chapter is the one of personal agency and how it could affect an entrepreneurs alertness. This is done by testing and illustrating the economic and institutional policies that restrict entrepreneurs from greatly rewarding opportunities in terms of profit. Entrepreneurs have a greater degree of entrepreneurial alertness between those in highly regulated industries and those in the less regulated ones. The test would enable entrepreneurs even in the future to know which industries to invest in and which to avoid. The tests would also cultivate the need to venture into entrepreneurship for people, who are not into it initially, but they would want to try it because they have been provided with information to help them succeed.

Relationship Between Entrepreneurial Success and the Applicability of Market-preserving Institutions

In the discussions, it is seen that Hong Kong and Singapore promote free trade. It has been explained that free trade produces high per capita for both cities. Regarding entrepreneurship, the information gathered has shown that if other towns and countries were also to have such institutional laws in their economies, their per capita would also increase, thus encouraging entrepreneurship because they will also have generated extra profits from their businesses.

Relationship Between Entrepreneurial Success and Triadic Reciprocal Causation

It has been seen that the increase in economic freedom of a country causes higher rates of economic freedom and not vice versa . Similarly, it has been discovered that economically, freer areas tend to generate higher per capita. Thus, entrepreneurs tend to make more profits.

Class Discussion

During the class presentation, I was able to draw flow charts of the reciprocal causation to enable class members to understand the concept of the relationship between the three functions - mental, psychological, and affective ones. The class discussion has also proved to be very helpful as other students had given their insights to the topic.

About author

Monica is the author and she is working on comic writing format now She always dreamed of working in this position, working with texts and new information. After all, her credo in life is to develop daily in different fields and be an interesting person. She is fluent in three languages and holds a Masters's Degree in Philology and Translator, and is also trying to master new fields in order to be knowledgeable in everything.