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Regulations, institutional quality and entrepreneurship

Author

Listed:
  • Dustin Chambers

    (Salisbury University)

  • Jonathan Munemo

    (Salisbury University)

Abstract

This paper examines the impact of startup regulations and institutional quality on the level of new business activity in a panel of 119 countries between 2001 and 2012. We find robust evidence that new business creation is significantly lower in countries with excessive barriers to entry, a lack of high-quality governmental institutions, or both. Specifically, increasing by one, the number of steps required to start a new business, reduces entrepreneurial activity between 3 and 7%. Furthermore, a one standard deviation increase in the overall average level of institutional quality is associated with a 34% increase in new business activity.

Suggested Citation

  • Dustin Chambers & Jonathan Munemo, 2019. "Regulations, institutional quality and entrepreneurship," Journal of Regulatory Economics, Springer, vol. 55(1), pages 46-66, February.
    • Handle: RePEc:kap:regeco:v:55:y:2019:i:1:d:10.1007_s11149-019-09377-w
    DOI: 10.1007/s11149-019-09377-w
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