Page - 277 - in Digital Entrepreneurship - Impact on Business and Society

e-readiness, level of trust in society, thefinancialmarket, and supporting industries e-readiness.Despite the fact that successful online venturing is associatedwith the preceding institutional elements, material and cultural aspects are essential to account for when discussing the success or failure of digital entrepreneurial ventures. TheState can influence theeconomy through itsdirect and indirect interventions in themarket and through thediverse forms that it can take.Therecanbe four types of states: Welfare State, Developmental State, Predatory State, and Regulatory State, the latter being the state that sets and enforces rules, thus, directly impacting economic activity (Rosecrance 1996). AWelfare State protects and promotes the economic and socialwell-being of its citizens,mainly through the redistribution of wealth by the government. ADevelopmental State is concernedwith engaging in advancementofbusiness sectors through industrial policy.WithinaDevelopmental State, governments strategicallymonitor and facilitate business activities, transac- tions, and e-commerce initiatives. If present, developmental states can develop the needed infrastructure for the reinforcement of new digital infrastructure, hence allowing the necessary ground for entrepreneurs to share and edit their ideas in the process of opportunity formation. Unfortunately, development states are scarcely found in developing countries, where, more often than not, Predatory States dominate. Predatory States are known for being elites who monopolize power through theabsenceofmarket competition,discreetdecision-makingprocesses, and weak institutional supportive capacity, which translates into the state withdrawing fromanyactivity that canassist, organize, andprotectdigital entrepreneurs (Carney andWitt 2012). Financial markets are the core element of institutional systems as they acquire and distribute capital (Davis and Marquis 2005). Developing economies tend to substitute financial markets with internal capital markets, usually based on accu- mulated familywealth (Steier 2009); thus, limiting inpart thegrowthof businesses as family capital is considered as afinite source. Financial resources play a critical role in digital entrepreneurship. Although online ventures require lower entry cost than that of a bricks-and-mortar business, the lack of financial resources present significant challenges, specifically to those belonging to lower socioeconomic social class. Corporate governance relates to howcompanies aremanaged and controlled. In developing countries, ownership of companies is concentratedwithin family hands (Khanna and Palepu 1997; La Porta et al. 2000). Therefore, ownership concen- tration affects how owners, labor, and management interact with each other. The existence of wealthy families is well noted in the Middle East, Latin America, Northern Africa, and Asia. This leads to family firms being the predominant organizational, and the latter are not only concernedwithfinancial returns, but also with nonfinancial benefits such as the family’s identity and preserving family influence in the business (Samara and Paul 2019). In the context of digital entrepreneurship, corporate governance levels refer to the extent to which top management leads and organizes a business through incorporating technology and e-commerce ideas andprojects.Creating a family supportive environment inwhich 286 G. Samara and J. Terzian