Entrepreneurial Entry: Which Institutions Matter?
AbstractIn this paper we explore the relationship between the individual decision to become an entrepreneur and the institutional context. We pinpoint the critical roles of property rights and the size of the state sector for entrepreneurial activity and test the relationships empirically by combining country-level institutional indicators for 44 countries with working age population survey data taken from the Global Enterprise Monitor. A methodological contribution is the use of factor analysis to reduce the statistical problems with the array of highly collinear institutional indicators. We find that the key institutional features that enhance entrepreneurial activity are indeed the rule of law and limits to the state sector. However, these results are sensitive to the level of development.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4123.
Length: 46 pages
Date of creation: Apr 2009
Date of revision:
Publication status: published in: Grzegorz Kolodko and Jacek Tomkiewicz (eds.), 20 Years of Transformation: Achievements, Problems and Perspectives, New York: Nova, 2011
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Other versions of this item:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- P14 - Economic Systems - - Capitalist Systems - - - Property Rights
- P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
- P37 - Economic Systems - - Socialist Institutions and Their Transitions - - - Legal
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-04-25 (All new papers)
- NEP-ENT-2009-04-25 (Entrepreneurship)
- NEP-SOC-2009-04-25 (Social Norms & Social Capital)
- NEP-TRA-2009-04-25 (Transition Economics)
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