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Linking Business Ownership and Perceived Administrative Complexity: An Empirical Analysis of 18 OECD Countries

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  • Andre van Stel
  • Viktor Stunnenberg

Abstract

Administrative burdens are known to be a major business constraint for incumbent SMEs in modern economies. Far less is known about the influence of these burdens on the startup of new firms. The current paper examines to what extent perceived administrative complexity related to starting a new business influences the number of business owners across 18 OECD countries. We test this relationship combining data on business ownership from EIM's COMPENDIA data base and data on perceived administrative complexity from the Eurobarometer public opinion surveys coordinated by the European Commission. Our regression model enables to explicitly control for the influence of unemployment on the level of business ownership ('refugee effect'). We also control for risk tolerance and access to finance. Our results suggest that perceived administrative complexity has a negative impact on the level of business ownership. However, the effect is not immediate but rather seems to emerge in the long run.

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Bibliographic Info

Paper provided by Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group in its series Papers on Entrepreneurship, Growth and Public Policy with number 2004-35.

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Length: 17 pages
Date of creation: Jul 2004
Date of revision:
Handle: RePEc:esi:egpdis:2004-35

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Keywords: business ownership; administrative burdens; unemployment;

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Cited by:
  1. Michael Fritsch & Pamela Mueller, 2005. "The Persistence of Regional New Business Formation-Activity over Time – Assessing the Potential of Policy Promotion Programs," ERSA conference papers ersa05p706, European Regional Science Association.
  2. Roy Thurik & Isabel Grilo, 2006. "Latent and actual entrepreneurship in Europe and the US: some recent developments," Scales Research Reports N200514, EIM Business and Policy Research.
  3. Roy Thurik & Isabel Grilo, 2006. "Entrepreneurial engagement levels in the European Union," Scales Research Reports N200515, EIM Business and Policy Research.
  4. Bremmers, Harry J. & Poppe, Krijn J. & Wijnands, Jo H.M. & van der Meulen, Bernd M.J., 2008. "Administrative Burdens in the Dairy Industry – A Proposal for Empirical Research," 110th Seminar, February 18-22, 2008, Innsbruck-Igls, Austria 49886, European Association of Agricultural Economists.

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