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Legal institutions and high-growth aspiration entrepreneurship

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  • Troilo, Michael
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    Abstract

    Entrepreneurship is crucial for economic growth, yet comparatively little research has examined the relationship between institutions and new firm formation. I test the impact of property rights institutions and contracting institutions on high-growth-aspiration (HGA) entrants using the Global Entrepreneurship Monitor (GEM) survey data for 2000-2005. I find that property rights are more significant for profound market expansion and rule of law is more significant for high job growth. The number of procedures to enforce a contract, the number of procedures to start a business, and the number of days to start a business are negatively correlated with all types of HGA entrepreneurship. A common law legal system is negatively correlated with entrepreneurship combining high job growth and market expansion. These findings add nuance to prior studies that tout the importance of property rights and rule of law for entrepreneurship.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economic Systems.

    Volume (Year): 35 (2011)
    Issue (Month): 2 (June)
    Pages: 158-175

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    Handle: RePEc:eee:ecosys:v:35:y:2011:i:2:p:158-175

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    Keywords: Property rights institutions Rule of law Contracting institutions Entrepreneurship Legal systems Regulatory burden;

    References

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    Cited by:
    1. Prestin Lewis & Wei Lu & Louis C. Vaccaro, 2012. "Entrepreneurship and neoclassical economics: any chance for collaboration?," International Journal of Pluralism and Economics Education, Inderscience Enterprises Ltd, vol. 3(1), pages 84-90.
    2. Marcus Dejardin & Helene Laurent, 2014. "Greasing the wheels of entrepreneurship? A complement according to entrepreneurial motives," Working Papers 1402, University of Namur, Department of Economics.

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