This study explores the influence of green entrepreneurial activity on sustainable development, using institutional economics as a theoretical framework. Also, the role of entrepreneurship policy is analysed in the context of Saudi Arabia. Using information from the General Authority for Statistics from 13 Saudi Arabian cities, the main findings show that green entrepreneurship positively contributes to the economic, social, and environmental components of sustainable development during the period 2012–2017. These results demonstrate a measurable indication of sustainable development outcomes, whereby Saudi Arabian institutions align entrepreneurial activities with a positive triple bottom line effect. Accordingly, these findings contribute new evidence to justify government commitment to supporting green entrepreneurship in Saudi Arabia and encourage future domestic policies.

Recent decades have brought cultural changes toward the increase of environmentally-friendly initiatives such as green entrepreneurship. Some countries are failing to develop environmental initiatives, whereas others are transitioning and advancing toward this new trend. In particular, Saudi Arabia has initiated efforts toward becoming an ecologically-friendly society. Motivated by this, we explore whether cultural characteristics are associated with green entrepreneurship in Saudi Arabia. Institutional economics is adopted to frame our hypotheses and analysis. The hypothesized relationships were empirically tested in a sample of 84 observations from 21 cities during the period 2015–2018. Data were collected from reports by the Saudi General Authority and analyzed through regression models. The main results show that cultural characteristics, such as environmental actions, environmental consciousness, and temporal orientation, increase the level of green entrepreneurial activity across cities in Saudi Arabia. The findings of this study contribute to existing knowledge on green entrepreneurship, as well as to the discussion of implications for policy and practice related to environmentally-friendly productive activities.