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Economic freedom, entrepreneurial activity, and the service sector

Author

Listed:
  • Stephan F. Gohmann
  • Bradley K. Hobbs
  • Myra J. McCrickard

Abstract

Purpose - – The purpose of this paper is to focus on the impact of economic freedom on entrepreneurial activity in the service sector. Specifically, the paper examines how economic freedom at the state level affects employment among North American Industry Classification System (NAICS) six-digit service industries. Design/methodology/approach - – The paper uses a fixed effects model to predict the effect of economic freedom on employment in each of the NAICS six-digit service industries. The paper uses the significance of the economic freedom coefficients to determine which industries grow and which shrink with increases in economic freedom. Findings - – The empirical findings reveal that economic freedom improves job growth for some, but not for all industries. Employment tends to grow in the six-digit industries that are categorized as finance and insurance, administrative and waste services, and professional and technical services. Employment in many of the health care and social assistance industries as well as accommodation and food services industries tends to fall with increases in economic freedom. Originality/value - – These results give a more detailed assessment of the influence of economic freedom on employment growth based on micro-level data. The results can be used by policy makers to better understand how changes in economic freedom influence the portfolio of industries that develop in their states.

Suggested Citation

  • Stephan F. Gohmann & Bradley K. Hobbs & Myra J. McCrickard, 2013. "Economic freedom, entrepreneurial activity, and the service sector," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 2(2), pages 144-159, October.
    • Handle: RePEc:eme:jepppp:v:2:y:2013:i:2:p:144-159
    DOI: 10.1108/JEPP-Mar-2012-0015
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    Citations

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    Cited by:

    1. Juan M. Dempere & Alexandrina M. Pauceanu, 2022. "The impact of economic-related freedoms on the national entrepreneurial activity," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-20, December.
    2. Wesley M. Friske & Miles A. Zachary, 2019. "Regulation, New Venture Creation, and Resource-Advantage Theory: An Analysis of the U.S. Brewing Industry," Entrepreneurship Theory and Practice, , vol. 43(5), pages 999-1017, September.
    3. Yang Zhou & Joshua C. Hall, 2017. "The Impact of Marketization on Entrepreneurship in China: Recent Evidence," Working Papers 17-22, Department of Economics, West Virginia University.
    4. Joshua C. Hall & Robert A. Lawson & Saurav Roychoudhury, 2015. "Creating the Environment for Entrepreneurship through Economic Freedom," Working Papers 15-01, Department of Economics, West Virginia University.
    5. Piergiorgio Ricci, 2020. "How economic freedom reflects on the Bitcoin transaction network," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 47(1), pages 133-161, March.
    6. Çağatay KARAKÖY & Alptekin ULUTAŞ & Darjan KARABASEVIC & Salim ÜRE & Ali Oğuz BAYRAKÇIL, 2023. "The Evaluation of Economic Freedom Indexes of EU Countries with a GREY Hybrid MCDM Model," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 129-144, March.
    7. Joshua C. Hall & Donald J. Lacombe & Shree B. Pokharel, 2016. "Freedom and entrepreneurship: a spatial econometric approach," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 5(3), pages 404-411, November.

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