Abstract To address the lacuna of how informal institutions like Buddhism impact social entrepreneurship in different regions within a nation, this research draws on the social entrepreneurship literature and the regional Buddhist research to propose a mediating framework where the percentage of Buddhist entrepreneurs in a region is positively associated both with the level of prosocial behaviors such as charity, due to the values of Buddhism, and with the probability of establishing businesses in a less-developed region. It further proposes that charitable behaviors mediate the relationship between the percentage of Buddhist entrepreneurs in a region and establishing businesses in less-developed regions. This mediating effect is attributed to the mechanism that charitable behaviors absorb the limited resources of entrepreneurs, reducing their resources for establishing businesses in less-developed regions. We test these hypotheses on nationwide surveys of founders of private enterprises and find support for this mediating view. Broad implications for theoretical and empirical research are discussed.
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