The paper analyses the various interactions among the institutional and cultural environment and the quality of entrepreneurial activity in Greece. The institutional context and the way in which institutions perform in particular, shape the structure of entrepreneurial incentives. As explicitly demonstrated by Baumol (1990) institutions actually channel entrepreneurial talent toward different activities which may be productive, unproductive or destructive. At the same time, informal institutions, i.e. culture and values have proven to be of equal importance for entrepreneurship. In many cases, the design of formal institutions fails to take into account the existing informal institutional environment and its important constructs such as trust, social capital, norms and beliefs, or else culture. Such failures carry tremendous consequences in terms of a country’s economic performance and the prevailing types of entrepreneurship and growth, in specific. The interrelationship between formal and informal institutional environments and their effect on entrepreneurship and growth are subjects of increased research emphasis. Recent evidence show that well-functioning institutions are often observed in countries or regions where individual values are consistent with generalized morality and this implies a causal effect from values to formal institutional outcomes (Tabellini, 2007). The present study builds upon these theoretical insights in order to develop a theoretical construct and testable empirical hypotheses over the interactions between formal and informal institutions and their effect upon the supply of entrepreneurship in Greece.