A replication of ‘Entry regulation and entrepreneurship: a natural experiment in German craftsmanship’

Petrik Runst, Jörg Thomä, Katarzyna Haverkamp and Klaus Müller

No 2 (2017), ifh Working Papers from Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh)

Abstract: Rostam-Afschar (2014) analyzes the impact of the deregulation of the German Trade and Crafts Code of 2004 on entrepreneurial activity, using German microcensus (MC) data. He finds a positive effect on market entry and self-employment and no change in exit probabilities. As these results partially conflict with company registry data, we re-examine the causal effects. Most importantly, we generate a novel classification scheme that aims to achieve an improved identification of crafts trades. Non-craftsmen need to be removed from the analysis as the policy change exclusively pertains to the crafts sector. In contrast to Rostam-Afschar’s findings, the increase in self-employment and entry is more pronounced in the completely deregulated B-trades rather than the partially deregulated A-trades. In addition, exit probabilities do not remain constant but rather increase. Our results are in line with company registry data.

Keywords: Entrepreneurship; Regulation; Firm entry; Craftsmanship; Replication (search for similar items in EconPapers)
JEL-codes: I28 J24 L51 M13 (search for similar items in EconPapers)
Date: 2017, Revised 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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