Barriers to entry index: a ranking of starting a business difficulties for the United States

Purpose - The purpose of this paper is to present a new data set documenting various costs to starting a business across the 50 US states for the year 2011. Design/methodology/approach - The first ranking weights and organizes measures using principal components analysis. The second ranking averages subcomponents of the data across groups of variables with common themes. Findings - Most states largely maintain their relative position across both Methods 1 and 2 despite the difference in organization and weight of variables and groups across the two ranking methods – 21 of the top 25 states remained in the top 25 in both the Methods 1 and 2 rankings. Some states experience not insignificant changes between the two indexes and a few experience substantial changes. These changes can be attributed to the importance Method 1 places upon final fees, final processing time, and application formats for the Secretary of State. Research limitations/implications - A lack of empirical evidence, additional data, and a definitive theory on the impacts of barriers to entry measures for the USA constrains both how the data are presented as well as which measures were collected. This paper attempts to accommodate for this by presenting rankings derived from different methodologies. Practical implications - The composite barriers to entry measures can be used in policy analysis and possible research on rent-seeking. These data can also be used to study the determinants and relative costs of entrepreneurship. Originality/value - This paper presents entry-specific regulatory measures currently undocumented in the literature.