IDEAS home Printed from https://ideas.repec.org/a/eme/jepppp/jepp-12-2015-0038.html
   My bibliography  Save this article

Freedom and entrepreneurship: a spatial econometric approach

Author

Listed:
  • Joshua C. Hall
  • Donald J. Lacombe
  • Shree B. Pokharel

Abstract

Purpose - While many studies find a positive relationship between economic freedom and entrepreneurship, very few of these studies account for possible spatial autocorrelation. Moreover, the development of an overall freedom measure has allowed researchers to test the relationship between overall freedom (personal plus economic) and entrepreneurship. The literature, however, does not account for spatial dependence in entrepreneurial activity. The purpose of this paper is to test for possible spatial dependence in entrepreneurial activity. Design/methodology/approach - The authors employ a spatial autoregressive model to account for possible spatial dependence in entrepreneurial activity across states. The authors have data for entrepreneurial activity and overall freedom for a cross-section of data on the 48 contiguous US states for 2009. Findings - The authors find no evidence of spatial dependence in entrepreneurial activity. Research limitations/implications - The authors are limited to a cross-section. Combined with the spatial lag of the dependent variable, the authors might have too few observations to find statistical significance on either the spatial lag or other explanatory variables. Practical implications - Future research should continue to account for possible spatial dependence. Social implications - Entrepreneurship is key to economic growth. Freedom has been shown to lead to more entrepreneurship at the state level in other research. Originality/value - This brief research note is the first paper to account for spatial dependence in the relationship between overall freedom and entrepreneurial activity.

Suggested Citation

  • Joshua C. Hall & Donald J. Lacombe & Shree B. Pokharel, 2016. "Freedom and entrepreneurship: a spatial econometric approach," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 5(3), pages 404-411, November.
    • Handle: RePEc:eme:jepppp:jepp-12-2015-0038
    DOI: 10.1108/JEPP-12-2015-0038
    as

    Download full text from publisher

    File URL: https://www.emerald.com/insight/content/doi/10.1108/JEPP-12-2015-0038/full/html?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://www.emerald.com/insight/content/doi/10.1108/JEPP-12-2015-0038/full/pdf?utm_source=repec&utm_medium=feed&utm_campaign=repec
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1108/JEPP-12-2015-0038?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nan Langowitz & Maria Minniti, 2007. "The Entrepreneurial Propensity of Women," Entrepreneurship Theory and Practice, , vol. 31(3), pages 341-364, May.
    2. Sobel, Russell S., 2008. "Testing Baumol: Institutional quality and the productivity of entrepreneurship," Journal of Business Venturing, Elsevier, vol. 23(6), pages 641-655, November.
    3. Compton, Ryan A. & Giedeman, Daniel C. & Hoover, Gary A., 2011. "Panel evidence on economic freedom and growth in the United States," European Journal of Political Economy, Elsevier, vol. 27(3), pages 423-435, September.
    4. Baumol, William J., 1996. "Entrepreneurship: Productive, unproductive, and destructive," Journal of Business Venturing, Elsevier, vol. 11(1), pages 3-22, January.
    5. Steven F. Kreft & Russell S. Sobel, 2005. "Public Policy, Entrepreneurship, And Economic Freedom," Cato Journal, Cato Journal, Cato Institute, vol. 25(3), pages 595-616, Fall.
    6. Kristina Nyström, 2008. "The institutions of economic freedom and entrepreneurship: evidence from panel data," Public Choice, Springer, vol. 136(3), pages 269-282, September.
    7. Yasuhiro Sato & Takatoshi Tabuchi & Kazuhiro Yamamoto, 2012. "Market size and entrepreneurship," Journal of Economic Geography, Oxford University Press, vol. 12(6), pages 1139-1166, November.
    8. Noel Campbell & David T. Mitchell & Tammy M. Rogers, 2013. "Multiple measures of US entrepreneurial activity and classical liberal institutions," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 2(1), pages 4-20, April.
    9. Stephan F. Gohmann & Bradley K. Hobbs & Myra J. McCrickard, 2013. "Economic freedom, entrepreneurial activity, and the service sector," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 2(2), pages 144-159, October.
    10. 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.
    11. Jeffery S. McMullen & D. Ray Bagby & Leslie E. Palich, 2008. "Economic Freedom and the Motivation to Engage in Entrepreneurial Action," Entrepreneurship Theory and Practice, , vol. 32(5), pages 875-895, September.
    12. Easton, Stephen T & Walker, Michael A, 1997. "Income, Growth, and Economic Freedom," American Economic Review, American Economic Association, vol. 87(2), pages 328-332, May.
    13. Bologna, Jamie & Young, Andrew T. & Lacombe, Donald J., 2016. "A spatial analysis of incomes and institutional quality: evidence from US metropolitan areas," Journal of Institutional Economics, Cambridge University Press, vol. 12(1), pages 191-216, March.
    14. R.W. Hafer, 2013. "Entrepreneurship and state economic growth," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 2(1), pages 67-79, April.
    15. Edward L. Glaeser & Stuart S. Rosenthal & William C. Strange, 2010. "Cities and Entrepreneurship," NBER Books, National Bureau of Economic Research, Inc, number glae09-1, March.
    16. Castaño, María-Soledad & Méndez, María-Teresa & Galindo, Miguel-Ángel, 2015. "The effect of social, cultural, and economic factors on entrepreneurship," Journal of Business Research, Elsevier, vol. 68(7), pages 1496-1500.
    17. Glaeser, Edward L. & Rosenthal, Stuart S. & Strange, William C., 2010. "Urban economics and entrepreneurship," Journal of Urban Economics, Elsevier, vol. 67(1), pages 1-14, January.
    18. Rosenthal, Stuart S. & Ross, Amanda, 2010. "Violent crime, entrepreneurship, and cities," Journal of Urban Economics, Elsevier, vol. 67(1), pages 135-149, January.
    19. Richard Cebula & Fabrizio Rossi & Jeff Clark, 2016. "The impact of higher quality government regulation of business and greater economic freedom on living standards," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 5(1), pages 82-94, April.
    20. Joshua Hall & Robert Lawson, 2009. "Economic Freedom and Peace," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(4), pages 445-446, December.
    21. Mulholland, Sean E. & Hernandez-Julian, Rey, 2013. "Does Economic Freedom Lead to Selective Migration By Education?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 43(1).
    22. Dmitriy Krichevskiy & Thomas Snyder, 2015. "U.S. State Government policies and entrepreneurship," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 4(1), pages 102-110, April.
    23. Bologna, Jamie, 2014. "A Spatial Analysis of Entrepreneurship and Institutional Quality: Evidence from U.S. Metropolitan Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 44(2).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jabeur, Sami Ben & Ballouk, Houssein & Mefteh-Wali, Salma & Omri, Anis, 2022. "Forecasting the macrolevel determinants of entrepreneurial opportunities using artificial intelligence models," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    2. Joshua C. Hall, 2017. "A "Model" Model: McCloskey and the Craft of Economics," Working Papers 17-09, Department of Economics, West Virginia University.
    3. Dvouletý, Ondřej, 2018. "How to analyse determinants of entrepreneurship and self-employment at the country level? A methodological contribution," Journal of Business Venturing Insights, Elsevier, vol. 9(C), pages 92-99.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jamie Bologna & Amanda Ross, 2015. "Corruption and Entrepreneurship: Evidence from a Random Audit Program," Working Papers 15-05, Department of Economics, West Virginia University.
    2. Daniel L. Bennett & Boris Nikolaev, 2021. "Individualism, pro-market institutions, and national innovation," Small Business Economics, Springer, vol. 57(4), pages 2085-2106, December.
    3. Bologna, Jamie, 2014. "A Spatial Analysis of Entrepreneurship and Institutional Quality: Evidence from U.S. Metropolitan Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 44(2).
    4. Daniel L. Bennett, 2021. "Local economic freedom and creative destruction in America," Small Business Economics, Springer, vol. 56(1), pages 333-353, January.
    5. Lucas, David & Boudreaux, Christopher, 2018. "Federal Regulation, Job Creation, and the Moderating Effect of State Economic Freedom," MPRA Paper 92593, University Library of Munich, Germany.
    6. Christopher J. Boudreaux & Boris Nikolaev, 2019. "Capital is not enough: opportunity entrepreneurship and formal institutions," Small Business Economics, Springer, vol. 53(3), pages 709-738, October.
    7. Trey Malone & Jayson L. Lusk, 2016. "Brewing up entrepreneurship: government intervention in beer," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 5(3), pages 325-342, November.
    8. Lucas, David S. & Boudreaux, Christopher J., 2020. "National regulation, state-level policy, and local job creation in the United States: A multilevel perspective," Research Policy, Elsevier, vol. 49(4).
    9. Turan Yay & Gülsün G. Yay & Tolga Aksoy, 2018. "Impact of institutions on entrepreneurship: a panel data analysis," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 8(1), pages 131-160, April.
    10. David S. Lucas & Christopher J. Boudreaux, 2019. "The Interdependence of Hierarchical Institutions: Federal Regulation, Job Creation, and the Moderating Effect of State Economic Freedom," Papers 1903.02924, arXiv.org.
    11. Jamie Bologna & Amanda Ross, 2015. "Corruption and entrepreneurship: evidence from Brazilian municipalities," Public Choice, Springer, vol. 165(1), pages 59-77, October.
    12. Daniel L. Bennett, 2021. "Local institutional heterogeneity & firm dynamism: Decomposing the metropolitan economic freedom index," Small Business Economics, Springer, vol. 57(1), pages 493-511, June.
    13. Boudreaux, Christopher J. & Nikolaev, Boris N. & Klein, Peter, 2019. "Socio-cognitive traits and entrepreneurship: The moderating role of economic institutions," Journal of Business Venturing, Elsevier, vol. 34(1), pages 178-196.
    14. Joshua C. Hall & Dean Stansel & Danko Tarabar, 2015. "Economic Freedom Studies at the State Level: A Survey," Working Papers 15-07, Department of Economics, West Virginia University.
    15. Dove, John A., 2015. "The effect of judicial independence on entrepreneurship in the US states," Economic Systems, Elsevier, vol. 39(1), pages 72-96.
    16. Justin T. Callais & Jamie Bologna Pavlik, 2023. "Does economic freedom lighten the blow? Evidence from the great recession in the United States," Economics of Governance, Springer, vol. 24(3), pages 357-398, September.
    17. Monika Mühlböck & Julia-Rita Warmuth & Marian Holienka & Bernhard Kittel, 2018. "Desperate entrepreneurs: no opportunities, no skills," International Entrepreneurship and Management Journal, Springer, vol. 14(4), pages 975-997, December.
    18. Maribel Guerrero & David Urbano, 2020. "Institutional conditions and social innovations in emerging economies: insights from Mexican enterprises’ initiatives for protecting/preventing the effect of violent events," The Journal of Technology Transfer, Springer, vol. 45(4), pages 929-957, August.
    19. Boudreaux, Christopher & Caudill, Steven, 2019. "Entrepreneurship, Institutions, and Economic Growth: Does the Level of Development Matter?," MPRA Paper 94244, University Library of Munich, Germany.
    20. Angulo-Guerrero, María J. & Pérez-Moreno, Salvador & Abad-Guerrero, Isabel M., 2017. "How economic freedom affects opportunity and necessity entrepreneurship in the OECD countries," Journal of Business Research, Elsevier, vol. 73(C), pages 30-37.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eme:jepppp:jepp-12-2015-0038. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Emerald Support (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.