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Legal institutions and high-growth aspiration entrepreneurship

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  • Troilo, Michael

Abstract

Entrepreneurship is crucial for economic growth, yet comparatively little research has examined the relationship between institutions and new firm formation. I test the impact of property rights institutions and contracting institutions on high-growth-aspiration (HGA) entrants using the Global Entrepreneurship Monitor (GEM) survey data for 2000-2005. I find that property rights are more significant for profound market expansion and rule of law is more significant for high job growth. The number of procedures to enforce a contract, the number of procedures to start a business, and the number of days to start a business are negatively correlated with all types of HGA entrepreneurship. A common law legal system is negatively correlated with entrepreneurship combining high job growth and market expansion. These findings add nuance to prior studies that tout the importance of property rights and rule of law for entrepreneurship.

Suggested Citation

  • Troilo, Michael, 2011. "Legal institutions and high-growth aspiration entrepreneurship," Economic Systems, Elsevier, vol. 35(2), pages 158-175, June.
  • Handle: RePEc:eee:ecosys:v:35:y:2011:i:2:p:158-175
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Brixiova, Zuzana & Égert, Balázs, 2017. "Entrepreneurship, institutions and skills in low-income countries," Economic Modelling, Elsevier, vol. 67(C), pages 381-391.
    2. repec:cys:ecocyb:v:50:y:2017:i:1:p:187-203 is not listed on IDEAS
    3. Saul Estrin & Tomasz Mickiewicz & Anna Rebmann, 2017. "Prospect theory and the effects of bankruptcy laws on entrepreneurial aspirations," Small Business Economics, Springer, vol. 48(4), pages 977-997, April.
    4. Dove, John A., 2015. "The effect of judicial independence on entrepreneurship in the US states," Economic Systems, Elsevier, vol. 39(1), pages 72-96.
    5. repec:bla:pbudge:v:37:y:2017:i:3:p:24-46 is not listed on IDEAS
    6. Michael Sheriff & Moreno Muffatto & Sarah Cooper, 2016. "Measuring entrepreneurship environments in Africa: challenges in using international reports," International Journal of Entrepreneurship and Innovation Management, Inderscience Enterprises Ltd, vol. 20(1/2), pages 20-44.
    7. Prestin Lewis & Wei Lu & Louis C. Vaccaro, 2012. "Entrepreneurship and neoclassical economics: any chance for collaboration?," International Journal of Pluralism and Economics Education, Inderscience Enterprises Ltd, vol. 3(1), pages 84-90.
    8. Daniela Ionita & Ionel Dumitru & Mihaela Constantinescu & Stefan Caescu, 2015. "Entrereneurial Clusters in European Union. A Macroeconomic Comparative Analysis," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 17(38), pages 1-93, February.
    9. Marcus Dejardin & Helene Laurent, 2014. "Greasing the wheels of entrepreneurship? A complement according to entrepreneurial motives," Working Papers 1402, University of Namur, Department of Economics.
    10. Tamilina, Larysa & Tamilina, Natalya, 2015. "Psychology of Trust: A Three Component Analytical Framework to Explain the Impact of Formal Institutions on Social Trust Formation," MPRA Paper 68647, University Library of Munich, Germany, revised 10 Feb 2015.

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