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Greasing the wheels of entrepreneurship? A complement according to entrepreneurial motives

  • Marcus Dejardin


    (Centre de recherches en Economie Regionale et Politique Economique, UNamur)

  • Helene Laurent


    (Centre de recherches en Economie Regionale et Politique Economique, UNamur)

The idea that corruption may, in some situations, be beneficial is widely studied within the context of growth. In the field of entrepreneurship, a unique paper by Dreher and Gassebner (2011) explicitly documents it. Their findings support the assumption that corruption “greases the wheels” of strict regulation for early-stage firms. In this article, we complement their seminal work. We provide evidence that entrepreneurs are heterogeneous in their response to the institutional environment. In particular, corruption and regulation affect entrepreneurship to different extent, according to the underlying motivation compelling an individual to open a business. Opportunity-driven entrepreneurs are much more affected by corruption and regulation than necessity-driven ones.

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Paper provided by University of Namur, Department of Economics in its series Working Papers with number 1402.

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Length: 24 pages
Date of creation: Mar 2014
Date of revision:
Handle: RePEc:nam:wpaper:1402
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