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Entrepreneurial Innovations, Entrepreneurship Policy and Globalization

  • Douhan, Robin
  • Norbäck, Pehr-Johan
  • Persson, Lars

What explains the world-wide trend of pro-entrepreneurial policies? We study entrepreneurial policy in a lobbying model taking into account the conflict of interest between entrepreneurs and incumbents. It is shown that international market integration leads to more pro-entrepreneurial policies. It is then more difficult to protect the profits of incumbents from entrepreneurial entry and pro-entrepreneurial policies make foreign entrepreneurs less aggressive. Using the World Bank Doing Business database, we find evidence that international openness reduces barriers to entry for new entrepreneurs and that the effect is stronger in countries with more rent-seeking governments.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7752.

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Date of creation: Mar 2010
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Handle: RePEc:cpr:ceprdp:7752
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