The Effect of Business Regulations on Nascent and Young Business Entrepreneurship

André van Stel, David Storey and Roy Thurik

Small Business Economics, 2007, vol. 28, issue 2, 186 pages

Abstract: We examine the relationship, across 39 countries, between regulation and entrepreneurship using a new two-equation model. We find the minimum capital requirement required to start a business lowers entrepreneurship rates across countries, as do labour market regulations. However the administrative considerations of starting a business – such as the time, the cost, or the number of procedures required – are unrelated to the formation rate of either nascent or young businesses. Given the explicit link made by Djankov et al. [Djankov et al. 2002, ‹The Regulation of Entry’, Quarterly Journal of Economics 117(1), 1–37] between the speed and ease with which businesses may be established in a country and its economic performance – and the enthusiasm with which this link has been grasped by European Union policy makers – our findings imply this link needs reconsidering. Copyright Springer Science+Business Media, LLC 2007

Keywords: Global Entrepreneurship Monitor; nascent entrepreneurship; regulation; World Bank Doing Business; young businesses; K20; L26; L51; M13; O57 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (260)

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Working Paper: The effect of business regulations on nascent and young business entrepreneurship (2006)
Working Paper: The Effect of Business Regulations on Nascent and Young Business Entrepreneurship (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:28:y:2007:i:2:p:171-186

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DOI: 10.1007/s11187-006-9014-1

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