Over the last decades, the contribution of entrepreneurship to economic
growth has been widely recognized by many economic researchers
(Wong et al., 2005; Desai, 2011; Acs et al., 2014; Urbano et al., 2019).
Entrepreneurial literature reflects the fact that entrepreneurship creates
new job places, drives innovation, and leads to more equal distribution
of income (Baumol, 1990; Acs, 2006). Due to the fact that institutions may
shape conditions for the development of entrepreneurship or destroy it, I
(institution) is included as a third variable in the relationship between E
(entrepreneurship) and EG (economic growth). The purpose of this
discussion paper is to show the relationship between institutional framework and economic agents' behavior. It provides the actual definition of
institutions, general understanding of its classification (formal and
informal institutions), and then depicts the impact of institutions on
economic behavior in the context of entrepreneurship through different
case study analyses. Since the topic “Institutions-Entrepreneurship Economic Growth” is very trendy nowadays and located at the intersection of independent research areas, and due to the complexity and rapid
dynamics of it, this paper attempts to provide readers with some basic
aspects of this subject.