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The Influence of Country-Level Governance on Business Environment and Entrepreneurship: a Global Perspective

Author

Listed:
  • Adrian Grosanu

    (Babes-Bolyai University of Cluj-Napoca)

  • Cristina Bota-Avram

    (Babes-Bolyai University of Cluj-Napoca)

  • Paula Ramona Rachisan

    (Babes-Bolyai University of Cluj-Napoca)

  • Roumen Vesselinov

    (Queens College, City University of New York)

Abstract

The main purpose of this study is to analyze the influence of country-level governance on business environment and entrepreneurship for an international large sample of countries for a period of six years (2007-2012). The dimensions of country-level governance at macroeconomic level will be captured by using the following six indicators developed by the World Bank: 1. Voice and accountability; 2. Political stability and absence of violence; 3. Government effectiveness; 4. Regulatory quality; 5. Rule of law; 6. Control of corruption. To capture the quality of business environment we use the Ease of doing business index developed by the World Bank in its Doing Business report series. To measure entrepreneurship we use the World Bank Group Entrepreneurship Survey where the number of new registered businesses, as a percentage of the working age population is defined as a measure of formal entrepreneurship. In order to capture the extent to which country-level governance does influence business environment and entrepreneurship, we analyze the data using cross-sectional time-series random effects generalized least square (GLS) models. The results of this panel data analysis clarifies and quantifies the influence that various characteristics of country-level governance could have on business environment and entrepreneurship. Therefore, this study could have significant implications for policy-makers as well as for businesses.

Suggested Citation

  • Adrian Grosanu & Cristina Bota-Avram & Paula Ramona Rachisan & Roumen Vesselinov, 2015. "The Influence of Country-Level Governance on Business Environment and Entrepreneurship: a Global Perspective," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(38), pages 1-60, February.
    • Handle: RePEc:aes:amfeco:v:38:y:2015:i:17:p:60
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    References listed on IDEAS

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    2. Oana Raluca Ivan, 2019. "Compliance or Not with the New Corporate Governance Code. A Survey at Bucharest Stock Exchange," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(4), pages 186-195, December.
    3. Vahid Jafari-Sadeghi & Jean-Marie Nkongolo-Bakenda & Léo-Paul Dana & Robert B. Anderson & Paolo Pietro Biancone, 2020. "Home Country Institutional Context and Entrepreneurial Internationalization: The Significance of Human Capital Attributes," Journal of International Entrepreneurship, Springer, vol. 18(2), pages 165-195, June.
    4. Ivan Oana Raluca, 2018. "Integrated Reporting in the Context of Corporate Governance. Case study on the Adoption of Integrated Reporting of Romanian Companies listed on BSE," Valahian Journal of Economic Studies, Sciendo, vol. 9(2), pages 127-138, November.
    5. Kantis, Hugo D. & Federico, Juan S. & García, Sabrina Ibarra, 2020. "Entrepreneurship policy and systemic conditions: Evidence-based implications and recommendations for emerging countries," Socio-Economic Planning Sciences, Elsevier, vol. 72(C).
    6. Cristina Boţa-Avram & Adrian Groşanu & Paula-Ramona Răchişan & Marius Dan Gavriletea, 2018. "The Bidirectional Causality between Country-Level Governance, Economic Growth and Sustainable Development: A Cross-Country Data Analysis," Sustainability, MDPI, vol. 10(2), pages 1-24, February.
    7. Monica Violeta Achim & Sorin Nicolae Borlea & Codruţa Mare, 2018. "Geocentric Behavior Dimension of the Organization’ Performance in the Context of Globalization," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 135(1), pages 401-420, January.
    8. Mekonnen Bogale Abegaz & Kenenisa Lemi Debela & Reta Megersa Hundie, 2023. "The effect of governance on entrepreneurship: from all income economies perspective," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-18, December.
    9. Yilmaz Bayar & Marius Dan Gavriletea, 2018. "Peace, terrorism and economic growth in Middle East and North African countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(5), pages 2373-2392, September.
    10. Faozi A. Almaqtari & Abdulwahid Hashid & Najib H. S. Farhan & Mosab I. Tabash & Waleed M. Al‐ahdal, 2022. "An empirical examination of the impact of country‐level corporate governance on profitability of Indian banks," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 1912-1932, April.
    11. Jafari Sadeghi, Vahid & Nkongolo-Bakenda, Jean-Marie & Anderson, Robert B. & Dana, Léo-Paul, 2019. "An institution-based view of international entrepreneurship: A comparison of context-based and universal determinants in developing and economically advanced countries," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    12. Medase, S. Kehinde & Ahali, Aaron Yaw & Belitski, Maksim, 2023. "Natural resources, quality of institutions and entrepreneurship activity," Resources Policy, Elsevier, vol. 83(C).
    13. Jaroslav BELAS & Lubomir BELAS & Martin CEPEL & Zoltan ROZSA, 2019. "The Impact Of The Public Sector On The Quality Of The Business Environment In The Sme Segment," REVISTA ADMINISTRATIE SI MANAGEMENT PUBLIC, Faculty of Administration and Public Management, Academy of Economic Studies, Bucharest, Romania, vol. 2019(32), pages 18-31, June.
    14. Daly, Saida & Garroud, Chadia, 2020. "The effects of Entrepreneurship and Sectoral Outputs on three Dimensions of Sustainable Development: A Literature Review and an Empirical Assessment for Developed Countries," MPRA Paper 104945, University Library of Munich, Germany, revised 16 Oct 2020.
    15. Miao, Chao & Gast, Johanna & Laouiti, Rahma & Nakara, Walid, 2022. "Institutional factors, religiosity, and entrepreneurial activity: A quantitative examination across 85 countries," World Development, Elsevier, vol. 149(C).

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    More about this item

    Keywords

    business environment; entrepreneurship; governance indicators; legal origin; control of corruption; regulatory quality.;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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