How Transnational Entrepreneurs are Responding to Institutional Voids:A Study of Transnational Entrepreneurs from Sri Lanka

This paper explores the formal institutional voids identified by transnational entrepreneurs in their home country context of Sri Lanka. Institutional voids arise as a result of underdeveloped or non-existent formal institutions and are more prevalent in transition/emerging economies. Such voids are an impediment to the economic and social development of a nation. It is beneficial to both scholars and policymakers alike to understand how transnational entrepreneurs grapple with institutional voids in transition economies particularly as diaspora entrepreneurship is seen as a contributing factor to regional economic development in Asia. The research from Sri Lanka highlights the particularly challenging institutional voids in the political, legal and regulatory systems that discourage transnational entrepreneurial investment in transition economies. Findings reveal how transnational entrepreneurs utilize their networks and social position to navigate the institutional voids and how they respond to some of these voids. Policy implications raised from these findings are discussed.