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Regulations, institutional quality and entrepreneurship

Author

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  • Dustin Chambers

    (Salisbury University)

  • Jonathan Munemo

    (Salisbury University)

Abstract

This paper examines the impact of startup regulations and institutional quality on the level of new business activity in a panel of 119 countries between 2001 and 2012. We find robust evidence that new business creation is significantly lower in countries with excessive barriers to entry, a lack of high-quality governmental institutions, or both. Specifically, increasing by one, the number of steps required to start a new business, reduces entrepreneurial activity between 3 and 7%. Furthermore, a one standard deviation increase in the overall average level of institutional quality is associated with a 34% increase in new business activity.

Suggested Citation

  • Dustin Chambers & Jonathan Munemo, 2019. "Regulations, institutional quality and entrepreneurship," Journal of Regulatory Economics, Springer, vol. 55(1), pages 46-66, February.
    • Handle: RePEc:kap:regeco:v:55:y:2019:i:1:d:10.1007_s11149-019-09377-w
    DOI: 10.1007/s11149-019-09377-w
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    13. Dustin Chambers & Colin O’Reilly, 2022. "The economic theory of regulation and inequality," Public Choice, Springer, vol. 193(1), pages 63-78, October.
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    17. Awoa, Paul Awoa & Efogo, Françoise Okah & Ondoa, Henri Atangana, 2023. "Oil dependence and entrepreneurship: Non-linear evidence," Economic Systems, Elsevier, vol. 47(1).
    18. Polemis, Michael L. & Stengos, Thanasis, 2020. "The impact of regulatory quality on business venturing: A semi-parametric approach," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 29-36.
    19. Aziz N. Berdiev & James W. Saunoris, 2021. "Do Disease Epidemics Stimulate or Repress Entrepreneurial Activity?," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 47(4), pages 464-486, October.
    20. Jamal Mohammad Ibrahim Abdulla Alnassai, 2023. "A Study on the Barriers to Entrepreneurship in the UAE," JRFM, MDPI, vol. 16(3), pages 1-14, February.
    21. Omri, Anis, 2020. "Formal versus informal entrepreneurship in emerging economies: The roles of governance and the financial sector," Journal of Business Research, Elsevier, vol. 108(C), pages 277-290.
    22. 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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