Entrepreneurship is increasingly being recognised as an indispensable tool for consolidating the market based economic system adopted by transition economies. Despite this, little is known about the factors that influence the decision to become entrepreneurially active in these countries. Academic research has recently demonstrated that differences in entrepreneurship levels are in-part explained by the varied impact across territories of entrepreneurial role models. Because Romania passed from a formal institutional framework based on central planning to one oriented towards a market economy, it had a near absence of entrepreneurial role models when it abandoned central planning.
Once a critical mass is overcome, the local institutional framework evolves to include a new social cognitive perception that is more fertile for entrepreneurial activity. As a consequence, the acceptance of entrepreneurial activity within the region becomes socially embedded.
The argument that supports this lies on the evolutionary institutional path that some regions adopt, which can gradually lead to the embedded character of informal institutions as a result of their cultural content. However, formal institutions are subordinate to informal ones in the sense that they are the deliberate means used to structure the interactions of a society in line with the norms and cultural guidelines that make up its informal institutions.
