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Entrepreneurial Innovations, Entrepreneurship Policy and Globalization

  • Douhan, Robin

    (Research Institute of Industrial Economics (IFN))

  • Norbäck, Pehr-Johan

    ()

    (Research Institute of Industrial Economics (IFN))

  • Persson, Lars

    ()

    (Research Institute of Industrial Economics (IFN))

What explains the world-wide trend of pro-entrepreneurial policies in the last few decades? We study entrepreneurial policy in a lobbying model taking into account the con.ict of interest between entrepreneurs and incumbents. It is shown that international market integration leads to more pro-entrepreneurial policies. It becomes more difficult to protect the profits of incumbent firms from entrepreneurial entry and pro-entrepreneurial policies make foreign entrepreneurs less aggressive. Making use of the Doing Business database, we find, consistent with our theory, 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 Research Institute of Industrial Economics in its series Working Paper Series with number 807.

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Length: 59 pages
Date of creation: 24 Aug 2009
Date of revision: 23 Jul 2013
Handle: RePEc:hhs:iuiwop:0807
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Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden

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