Entry-regulation and corruption: grease or sand in the wheels of entrepreneurship? Fresh evidence according to entrepreneurial motives

Marcus Dejardin () and Hélène Laurent ()
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Hélène Laurent: Université de Namur and Aix Marseille Univ, CNRS, AMSE

Small Business Economics, 2024, vol. 62, issue 3, No 17, 1223-1272

Abstract: Abstract The relationship between entry-regulation, corruption, and entrepreneurship is controversial in the literature. Using a broad cross-country dataset to deepen the investigation, this paper distinguishes opportunity and necessity-motivated entrepreneurship in different development contexts. Corruption might grease the wheels of ineffective administrative machinery in developing countries with heavy entry-regulation. Yet, the marginal effect of corruption will generally be non-significant in other developing countries and in developed countries. Moreover, our results suggest that corruption deters opportunity-motivated entrepreneurship—the type of entrepreneurship that may contribute the most to productivity, economic growth, and development—in developed countries.

Keywords: Entrepreneurship; Corruption; Regulation; Doing business; “Grease the wheels”; “Sand the wheels”; Opportunity; Necessity; Entrepreneurial motives (search for similar items in EconPapers)
JEL-codes: D73 F59 J24 L26 M13 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s11187-023-00802-1

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