Entrepreneurship and Regulatory Voids: The Case of Ridesharing

Amanda Deerfield and Niklas Elert ()
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Amanda Deerfield: Economics Department, Postal: St. Mary’s College of Maryland, 47646 College Drive, St. Mary's City, MD 20686

No 1426, Working Paper Series from Research Institute of Industrial Economics

Abstract: Formal institutions, e.g., regulations, are considered crucial determinants of entrepreneurship, but what enables regulatory change when there is a regulatory void, meaning entrepreneurship clashes with existing regulations? Drawing on public choice theory, we hypothesize that regulatory freedom facilitates the introduction of legislation to fill such voids. We test this hypothesis using unique data documenting the time for ridesharing to become legalized at the state level across the United States following its local (and often illegal) rollout. Results suggest states with greater regulatory freedom passed ridesharing legislation quicker, highlighting an underappreciated way that extant regulatory freedom facilitates the accommodation of entrepreneurship.

Keywords: Entrepreneurship; Innovation; Regulation; Institutional change; Institutional voids; Institutional entrepreneurship; Sharing economy; Economic freedom; Survival analysis (search for similar items in EconPapers)
JEL-codes: C21 O31 R49 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2022-03-24
New Economics Papers: this item is included in nep-ban, nep-ent, nep-ino, nep-lab, nep-reg, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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