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Corruption and bureaucracy in entrepreneurship

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  • Antonio Lecuna

    (School of Business and Economics, Universidad del Desarrollo)

Abstract

Entrepreneurship has been associated with three categories of factors: (1) macroeconomic factors, such as unemployment and income; (2) factors related to government institutions, such as corruption and political stability; and (3) competitiveness-related factors, such as the capacity for innovation and the number of procedures required to start a business. In this study, I find that all three categories are equally significant and that a combination of these three categories generates the most significant statistical results. The findings also reveal that two specific indicators are consistently more significant than the others. I posit that better control of corruption and a lower unemployment rate are associated with increasing levels of entrepreneurial activity as measured by business registrations and entrepreneur participation rates. Furthermore, interaction tests between the control of corruption and competitiveness-related factors found that simultaneous decreases in corruption and the number of procedures required to start a business provide added value, jointly boosting entrepreneurial activity. Panel data from 55 nations for the 2004–2009 period support these findings.

Suggested Citation

  • Antonio Lecuna, 2014. "Corruption and bureaucracy in entrepreneurship," Serie Working Papers 17, Universidad del Desarrollo, School of Business and Economics, revised Dec 2014.
    • Handle: RePEc:dsr:wpaper:17
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    entrepreneurship; institutions; public policy; economic development;
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