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The Institutions of Economic Freedom and Entrepreneurship: Evidence from Panel Data

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Abstract

This paper provides new evidence on the determinants of entrepreneurship across countries. The paper investigates the relationship between the institutional setting, in terms of economic freedom, and entrepreneurship, as measured by self-employment in a panel data setting covering 23 OECD countries and the time-period 1972-2002. The measure of economic freedom includes five aspects: size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and the regulation of credit, labour and business. The empirical findings show that a smaller government sector, better legal structure and security of property rights and less regulation of credit, labour and business tend to increase entrepreneurship.

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  • Nyström, Kristina, 2008. "The Institutions of Economic Freedom and Entrepreneurship: Evidence from Panel Data," Ratio Working Papers 114, The Ratio Institute.
  • Handle: RePEc:hhs:ratioi:0114
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    More about this item

    Keywords

    entrepreneurship; self-employment; institutions; economic freedom;

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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