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Legal institutions and high-growth aspiration entrepreneurship

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  • Troilo, Michael

Abstract

Entrepreneurship is crucial for economic growth, yet comparatively little research has examined the relationship between institutions and new firm formation. I test the impact of property rights institutions and contracting institutions on high-growth-aspiration (HGA) entrants using the Global Entrepreneurship Monitor (GEM) survey data for 2000-2005. I find that property rights are more significant for profound market expansion and rule of law is more significant for high job growth. The number of procedures to enforce a contract, the number of procedures to start a business, and the number of days to start a business are negatively correlated with all types of HGA entrepreneurship. A common law legal system is negatively correlated with entrepreneurship combining high job growth and market expansion. These findings add nuance to prior studies that tout the importance of property rights and rule of law for entrepreneurship.

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  • Troilo, Michael, 2011. "Legal institutions and high-growth aspiration entrepreneurship," Economic Systems, Elsevier, vol. 35(2), pages 158-175, June.
    • Handle: RePEc:eee:ecosys:v:35:y:2011:i:2:p:158-175
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    14. Barasa, L. & Kimuyu, P. & Vermeulen, P.A.M. & Knoben, J. & Kinyanjui, B., 2014. "Institutions, Resources and Innovation in Developng Countries : A Firm Level Approach," Other publications TiSEM 4150bffe-8365-4b51-a7e9-d, Tilburg University, School of Economics and Management.
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    19. Kadoukpè Gildas Magbondé & Djana Mignouna & Victor Manyong & Razack Adéoti & Ayélé Odile Sossou, 2023. "Impact of informal institutions on youth agribusiness participation in Southern Benin," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-26, December.
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    21. William Q. Judge & Yuping Liu–Thompkins & J. Lee Brown & Chatdanai Pongpatipat, 2015. "The Impact of Home Country Institutions on Corporate Technological Entrepreneurship via R&D Investments and Virtual World Presence," Entrepreneurship Theory and Practice, , vol. 39(2), pages 237-266, March.

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