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Entrepreneurship and Regulatory Voids: The Case of Ridesharing

Author

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  • Deerfield, Amanda

    (Economics Department)

  • Elert, Niklas

    (Research Institute of Industrial Economics (IFN))

Abstract

Formal institutions, e.g., regulations, are considered crucial determinants of entrepreneurship, but what enables regulatory change when there is a regulatory void, meaning entrepreneurship clashes with existing regulations? Drawing on public choice theory, we hypothesize that regulatory freedom facilitates the introduction of legislation to fill such voids. We test this hypothesis using unique data documenting the time for ridesharing to become legalized at the state level across the United States following its local (and often illegal) rollout. Results suggest states with greater regulatory freedom passed ridesharing legislation quicker, highlighting an underappreciated way that extant regulatory freedom facilitates the accommodation of entrepreneurship.

Suggested Citation

  • Deerfield, Amanda & Elert, Niklas, 2022. "Entrepreneurship and Regulatory Voids: The Case of Ridesharing," Working Paper Series 1426, Research Institute of Industrial Economics.
    • Handle: RePEc:hhs:iuiwop:1426
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    References listed on IDEAS

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    1. Lucas, David S. & Fuller, Caleb S. & Packard, Mark D., 2022. "Made to be broken? A theory of regulatory governance and rule-breaking entrepreneurial action," Journal of Business Venturing, Elsevier, vol. 37(6).

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    More about this item

    Keywords

    Entrepreneurship; Innovation; Regulation; Institutional change; Institutional voids; Institutional entrepreneurship; Sharing economy; Economic freedom; Survival analysis;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R49 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Other

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