Economic freedom and entrepreneurial activity: Some cross-country evidence
AbstractWhile much attention has been devoted to analyzing how the institutional framework and entrepreneurship impact growth, how economic policy and institutional design affect entrepreneurship appears to be much less analyzed. We try to explain cross-country differences in the level of entrepreneurship by differences in economic policy and institutional design. Specifically, we use measures of economic freedom from the Economic Freedom of the World database to examine which elements of economic policy making and the institutional framework are responsible for the supply of entrepreneurship Our data on entrepreneurship are derived from the Global Entrepreneurship Monitor. The combination of these two datasets is unique in the literature. We find that the size of government is negatively correlated with entrepreneurial activity but that sound money is positively correlated with entrepreneurial activity. Other measures of economic freedom are not significantly correlated with entrepreneurship.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Public Choice.
Volume (Year): 134 (2008)
Issue (Month): 3 (March)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100332
Economic freedom; Entrepreneurship; Cross-country variation; M13; O31; O50;
Other versions of this item:
- Christian Bjørnskov & Nicolai J. Foss, 2006. "Economic Freedom and entrepreneurial Activity Some Cross-Country Evidence," DRUID Working Papers 06-18, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sinn, Hans-Werner, 1997. "The selection principle and market failure in systems competition," Journal of Public Economics, Elsevier, vol. 66(2), pages 247-274, November.
- Harold Demsetz, 1981.
"Barriers to Entry,"
UCLA Economics Working Papers
192, UCLA Department of Economics.
- Sinn, Hans-Werner, 1995.
"A Theory of the Welfare State,"
CEPR Discussion Papers
1278, C.E.P.R. Discussion Papers.
- Philippe Aghion & Peter Howitt, 1990.
"A Model of Growth Through Creative Destruction,"
NBER Working Papers
3223, National Bureau of Economic Research, Inc.
- Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
- Wacziarg, Romain, 1998.
"Measuring the dynamic gains from trade,"
Policy Research Working Paper Series
2001, The World Bank.
- Assar Lindbeck & Sten Nyberg & Jšrgen W. Weibull, 1999.
"Social Norms And Economic Incentives In The Welfare State,"
The Quarterly Journal of Economics,
MIT Press, vol. 114(1), pages 1-35, February.
- Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen W., 1997. "Social Norms and Economic Incentives in the Welfare State," Working Paper Series 476, Research Institute of Industrial Economics.
- Jakob de Haan & Susanna Lundstroem & Jan-Egbert Sturm, 2005.
"Market oriented institutions and policies and economic growth: A critical survey,"
TWI Research Paper Series
5, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
- Jakob De Haan & Susanna Lundström & Jan-Egbert Sturm, 2006. "Market-oriented institutions and policies and economic growth: A critical survey," Journal of Economic Surveys, Wiley Blackwell, vol. 20(2), pages 157-191, 04.
- David G. Blanchflower, 2000.
"Self-Employment in OECD Countries,"
NBER Working Papers
7486, National Bureau of Economic Research, Inc.
- Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2004.
"Do Institutions Cause Growth?,"
NBER Working Papers
10568, National Bureau of Economic Research, Inc.
- James D. Gwartney & Robert A. Lawson & Randall G. Holcombe, 1999. "Economic Freedom and the Environment for Economic Growth," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 155(4), pages 643-, December.
- Friedman, Milton, 1977. "Nobel Lecture: Inflation and Unemployment," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 451-72, June.
- Wennekers, Sander & Thurik, Roy, 1999. " Linking Entrepreneurship and Economic Growth," Small Business Economics, Springer, vol. 13(1), pages 27-55, August.
- Grilo, I. & Thurik, A.R., 2004.
"Determinants Of Entrepreneurship In Europe,"
ERS-2004-106-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni.
- Isabel Grilo & Roy Thurik, 2004. "Determinants of entrepreneurship in Europe," Papers on Entrepreneurship, Growth and Public Policy 2004-30, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
- Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
- Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-91, December.
- Haan, Jakob de & Sturm, Jan-Egbert, 1999.
"On the relationship between economic freedom and economic growth,"
CCSO Working Papers
199903, University of Groningen, CCSO Centre for Economic Research.
- de Haan, Jakob & Sturm, Jan-Egbert, 2000. "On the relationship between economic freedom and economic growth," European Journal of Political Economy, Elsevier, vol. 16(2), pages 215-241, June.
- Brunetti, Aymo & Kisunko, Gregory & Weder, Beatrice, 1997. "Institutional obstacles to doing business : region-by-region results from a worldwide survey of the private sector," Policy Research Working Paper Series 1759, The World Bank.
- Paul Romer, 1991.
"Endogenous Technological Change,"
NBER Working Papers
3210, National Bureau of Economic Research, Inc.
- Carlsson, Fredrik & Lundström, Susanna, 2001.
"Economic Freedom and Growth:Decomposing the Effects,"
Working Papers in Economics
33, University of Gothenburg, Department of Economics.
- Carlsson, Fredrik & Lundstrom, Susanna, 2002. " Economic Freedom and Growth: Decomposing the Effects," Public Choice, Springer, vol. 112(3-4), pages 335-44, September.
- Henrekson, Magnus, 2002.
"Entrepreneurship: A Weak Link in the Welfare State,"
Working Paper Series in Economics and Finance
518, Stockholm School of Economics, revised 04 Mar 2005.
- Magnus Henrekson, 2005. "Entrepreneurship: a weak link in the welfare state?," Industrial and Corporate Change, Oxford University Press, vol. 14(3), pages 437-467, June.
- Rod Falvey & Neil Foster & David Greenaway, 2006. "Intellectual Property Rights and Economic Growth," Review of Development Economics, Wiley Blackwell, vol. 10(4), pages 700-719, November.
- Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
- Sturm, Jan-Egbert & Leertouwer, Erik & de Hann, Jakob, 2002. "Which Economic Freedoms Contribute to Growth? A Comment," Kyklos, Wiley Blackwell, vol. 55(3), pages 403-16.
- Nicolai J. Foss & Peter G. Klein, 2004. "Entrepreneurshoip and the Economic Theory of the Firm Any Gains from Trade?," DRUID Working Papers 04-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Berggren, Niclas, 2003. "The Benefits of Economic Freedom: A Survey," Ratio Working Papers 4, The Ratio Institute.
- Pierre-Guillaume Méon & Laurent Weill, 2004.
"Does better governance foster efficiency? An aggregate frontier analysis,"
Economics of Governance,
Springer, vol. 6(1), pages 75-90, January.
- Pierre-Guillaume Méon & Laurent Weill, 2005. "Does better governance foster efficiency? An aggregate frontier analysis," ULB Institutional Repository 2013/8368, ULB -- Universite Libre de Bruxelles.
- Herbert G. Grubel, 1998. "Economic Freedom and Human Welfare: Some Empirical Findings," Cato Journal, Cato Journal, Cato Institute, vol. 18(2), pages 287-304, Fall.
- Milo Bianchi & Magnus Henrekson, 2005.
"Is Neoclassical Economics still Entrepreneurless?,"
Wiley Blackwell, vol. 58(3), pages 353-377, 07.
- Blau, David M, 1987. "A Time-Series Analysis of Self-employment in the United State," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 445-67, June.
- David B. Audretsch & Roy Thurik, 2001. "Linking Entrepreneurship to Growth," OECD Science, Technology and Industry Working Papers 2001/2, OECD Publishing.
- Graafland, J.J. & Compen, B., 2012. "Economic Freedom and Life Satisfaction: A Cross Country Analysis," Discussion Paper 2012-038, Tilburg University, Center for Economic Research.
- Harris, Jared D. & Sapienza, Harry J. & Bowie, Norman E., 2009. "Ethics and entrepreneurship," Journal of Business Venturing, Elsevier, vol. 24(5), pages 407-418, September.
- Axel Dreher & Martin Gassebner, 2007.
"Greasing the Wheels of Entrepreneurship? The Impact of Regulations and Corruption on Firm Entry,"
CESifo Working Paper Series
2013, CESifo Group Munich.
- Axel Dreher & Martin Gassebner, 2007. "Greasing the wheels of entrepreneurship? The impact of regulations and corruption on firm entry," KOF Working papers 07-166, KOF Swiss Economic Institute, ETH Zurich.
- Cosmin MARINESCU, 2012. "Transaction Costs and Economic Performance: An Institutional Approach," Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 15(2), pages 371-379, December.
- Pete, Stefan & Nagy, Agnes & Matis, Dumitru & Gyorfy, Lehel Zoltan & Benyovszki, Annamaria & Petru, Tunde Petra, 2011. "Early-stage entrepreneurial aspirations in efficiency-driven economies," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 5-18, June.
- Garcia-Murillo, Martha & Velez-Ospina, Jorge Andres & Vargas-Leon, Patricia, 2012. "Where should governments invest? The impact of economic, political, social and technological factors on the formation of new firms," 23rd European Regional ITS Conference, Vienna 2012 60400, International Telecommunications Society (ITS).
- Almas Heshmati & Dan Johansson & Carl Magnus Bjuggren, 2010.
"Effective Corporate Tax Rates and the Size Distribution of Firms,"
Journal of Industry, Competition and Trade,
Springer, vol. 10(3), pages 297-317, September.
- Almas Heshmati & Dan Johansson & Carl Magnus Bjuggren, 2009. "Effective Corporate Tax Rates and the Size Distribution of Firms," TEMEP Discussion Papers 200923, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Nov 2009.
- Kodila-Tedika, Oasis & Agbor Agbor, Julius, 2012. "Does Trust Matter For Entrepreuneurship : Evidence From A Cross-Section Of Countries," MPRA Paper 42292, University Library of Munich, Germany.
- Nyström, Kristina, 2008.
"The Institutions of Economic Freedom and Entrepreneurship: Evidence from Panel Data,"
Ratio Working Papers
114, The Ratio Institute.
- Kristina Nyström, 2008. "The institutions of economic freedom and entrepreneurship: evidence from panel data," Public Choice, Springer, vol. 136(3), pages 269-282, September.
- Concepción Román & Emilio Congregado & José Millán, 2011. "Dependent self-employment as a way to evade employment protection legislation," Small Business Economics, Springer, vol. 37(3), pages 363-392, October.
- Kodila-Tedika, Oasis, 2012.
"Entrepreneurship and property right: de Soto'r right
[Entrepreneuriat et droit de propriété : de Soto a raison]," MPRA Paper 43464, University Library of Munich, Germany.
- Amoros, Jose Ernesto, 2009. "Entrepreneurship and Quality of Institutions," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Niels Bosma, 2012. "The Global Entrepreneurship Monitor (GEM) and its Impact on Entrepreneurship Research," Global Entrepreneurship Monitor Working Paper Series 1201, Global Entrepreneurship Research Association, revised May 2012.
- Cosmin Marinescu, 2013. "Institutional Quality of the Business Environment: Some European Practices in a Comparative Analysis," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 15(33), pages 270-287, February.
- Bergh, Andreas & Lyttkens, Carl Hampus, 2011. "Measuring institutional quality in ancient Athens," Working Papers 2011:10, Lund University, Department of Economics, revised 18 Oct 2011.
- Joshua Hall, 2008. "Randall G. Holcombe, Entrepreneurship and economic progress," The Review of Austrian Economics, Springer, vol. 21(2), pages 219-222, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.