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Institutional barriers to business entry in advanced economies

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  • Tanja Kosi
  • Štefan Bojnec

Abstract

The paper empirically examines the impact of freedom from regulation in different institutional areas on business entry rate in 10 Organisation for Economic Co-operation and Development countries over the period 1995--2007. Employing the feasible generalized least squares econometric approach, it discloses a positive association between business entry and the overall institutional freedom. Economic freedom in different institutional areas, however, does not appear to have the same importance for business entry. Institutional freedoms that are the most beneficial for business creation are product market freedom, property rights freedom, and freedom from corruption. This implies that simple and inexpensive administration procedures, competitive product markets, and transparent and effective legal/judicial system help promote business creation. Business entry is also positively associated with macroeconomic prosperity in terms of employment growth and the development of information and communication technology industry.

Suggested Citation

  • Tanja Kosi & Štefan Bojnec, 2013. "Institutional barriers to business entry in advanced economies," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 14(2), pages 317-329, April.
    • Handle: RePEc:taf:jbemgt:v:14:y:2013:i:2:p:317-329
    DOI: 10.3846/16111699.2011.633348
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    3. Tanja Planinc & Marko Kukanja & Saša Planinc, 2018. "Classification and Efficiency Analysis of Slovenian Restaurant SMEs," Academica Turistica - Tourism and Innovation Journal, University of Primorska Press, vol. 11(1), pages 31-42.
    4. Dagmara Nikulin & Małgorzata Gawrycka, 2021. "Implementation of the Concept of Flexicurity in the Selected Countries of Central Eastern Europe," Ekonomista, Polskie Towarzystwo Ekonomiczne, vol. 1, pages 118-141, January.
    5. Li, Kun-Sha & Xiong, Yong-Qing, 2022. "Host country’s environmental uncertainty, technological capability, and foreign market entry mode: Evidence from high-end equipment manufacturing MNEs in emerging markets," International Business Review, Elsevier, vol. 31(1).

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