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Business regulation and red tape in the entrepreneurial economy

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  • Nyström, Kristina

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

Abstract

This paper discusses the interrelationship between business regulations and entrepreneurial activities. Most empirical studies find that business regulations have a negative effect on the amount of entrepreneurial activities in an economy. In addition, we argue that the regulatory quality and amount of business regulation may also be influenced by the amount of entrepreneurial activities in the society since policymakers and bureaucrats tend to respond to changing conditions in the society. In the empirical part of the paper, data for 23 OECD countries for the period 1972-2002 in order to elaborate on the interrelationship between entrepreneurship and the quality of business regulations. The empirical findings indicate that there is a positive relationship between entrepreneurship, and the quality of business regulations.

Suggested Citation

  • Nyström, Kristina, 2010. "Business regulation and red tape in the entrepreneurial economy," Working Paper Series in Economics and Institutions of Innovation 225, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0225
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    References listed on IDEAS

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    1. David B. Audretsch & Isabel Grilo & A. Roy Thurik (ed.), 2007. "Handbook of Research on Entrepreneurship Policy," Books, Edward Elgar Publishing, number 3856.
    2. Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2002. "The Regulation of Entry," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 1-37.
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    9. Christian Bjørnskov & Nicolai Foss, 2010. "Economic Freedom and Entrepreneurial Activity: Some Cross-Country Evidence," Springer Books, in: Andreas Freytag & Roy Thurik (ed.), Entrepreneurship and Culture, chapter 0, pages 201-225, Springer.
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    Cited by:

    1. Monia Lougui & Kristina Nyström, 2014. "What obstacles do entrepreneurs encounter?," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 3(2), pages 275-291, October.

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    More about this item

    Keywords

    entrepreneurship; red tape; business regulation;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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