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Entrepreneurship and State Public Policy

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Author Info
Steven F. Kreft (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)
Elham Mafi-Kreft (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

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Abstract

Many state and local governments have focused on enacting policies to promote entrepreneurship in an effort to enhance economic growth. This paper will test the relationship between entrepreneurial activity and state economic freedom in a Granger causality framework. We build a panel data set of freedom scores and entrepreneurial activity measures within the fifty US states from 1981 to 2003, and our results show that, as a whole, economic freedom causes entrepreneurship. However, we find evidence that once entrepreneurs are in place, they increase the size of government spending, which is contradictory to economic freedom.

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File URL: http://www.bus.indiana.edu/riharbau/RePEc/iuk/wpaper/bepp2007-03-kreft-mafi.pdf
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Publisher Info
Paper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number 2007-03.

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Date of creation: Jan 2007
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Handle: RePEc:iuk:wpaper:2007-03

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Related research
Keywords: entrepreneurship public Policy economic freedom

Find related papers by JEL classification:
H7 - Public Economics - - State and Local Government; Intergovernmental Relations
H4 - Public Economics - - Publicly Provided Goods
H1 - Public Economics - - Structure and Scope of Government

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References listed on IDEAS
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.:
  1. Bruce, Donald, 2000. "Effects of the United States tax system on transitions into self-employment," Labour Economics, Elsevier, vol. 7(5), pages 545-574, September. [Downloadable!] (restricted)
  2. Blomstrom, Magnus & Lipsey, Robert E & Zejan, Mario, 1996. "Is Fixed Investment the Key to Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 111(1), pages 269-76, February. [Downloadable!] (restricted)
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  3. Holtz-Eakin, Douglas & Joulfaian, David & Rosen, Harvey S, 1994. "Sticking It Out: Entrepreneurial Survival and Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 102(1), pages 53-75, February. [Downloadable!] (restricted)
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  4. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January. [Downloadable!] (restricted)
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  5. Donald Bruce & Mohammed Mohsin, 2006. "Tax Policy and Entrepreneurship: New Time Series Evidence," Small Business Economics, Springer, vol. 26(5), pages 409-425, 06. [Downloadable!] (restricted)
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