Corruption and bureaucracy in entrepreneurship

Antonio Lecuna

No 17, Serie Working Papers from Universidad del Desarrollo, School of Business and Economics

Abstract: Entrepreneurship has been associated with three categories of factors: (1) macroeconomic factors, such as unemployment and income; (2) factors related to government institutions, such as corruption and political stability; and (3) competitiveness-related factors, such as the capacity for innovation and the number of procedures required to start a business. In this study, I find that all three categories are equally significant and that a combination of these three categories generates the most significant statistical results. The findings also reveal that two specific indicators are consistently more significant than the others. I posit that better control of corruption and a lower unemployment rate are associated with increasing levels of entrepreneurial activity as measured by business registrations and entrepreneur participation rates. Furthermore, interaction tests between the control of corruption and competitiveness-related factors found that simultaneous decreases in corruption and the number of procedures required to start a business provide added value, jointly boosting entrepreneurial activity. Panel data from 55 nations for the 2004–2009 period support these findings.

Keywords: entrepreneurship; institutions; public policy; economic development (search for similar items in EconPapers)
Pages: 27 pages
Date: 2014-12, Revised 2014-12
New Economics Papers: this item is included in nep-ent, nep-ino and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:dsr:wpaper:17

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