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One size fits all? The differential impact of federal regulation on early-stage entrepreneurial activity across US states

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  • John A. Dove

    (Troy University)

Abstract

Numerous studies evaluate how a jurisdiction’s institutional and specifically regulatory environment impact firm formation and entrepreneurial activity. This study adds to this by employing a dataset measuring the differential impact that federal regulations have on industries across US states. Specifically, the paper addresses how such differences affect several facets of early-stage entrepreneurial activity, including an index measure of early-stage entrepreneurship, opportunity entrepreneurship, job creation at startup, and new firm survival rates all derived from the Kauffman Index of Entrepreneurial Activity. Overall, the results suggest that early-stage entrepreneurial activity tends to be negatively correlated with a relatively more burdensome federal regulatory environment. While the channels do not indicate an effect through new firm formation or firm survival rates, both opportunity entrepreneurship and job formation are negatively and significantly affected. Implications are discussed.

Suggested Citation

  • John A. Dove, 2023. "One size fits all? The differential impact of federal regulation on early-stage entrepreneurial activity across US states," Journal of Regulatory Economics, Springer, vol. 63(1), pages 57-73, April.
    • Handle: RePEc:kap:regeco:v:63:y:2023:i:1:d:10.1007_s11149-023-09457-y
    DOI: 10.1007/s11149-023-09457-y
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    More about this item

    Keywords

    Regulation; Entrepreneurship; Firm Formation; Job creation; Early-stage entrepreneurship;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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