The Effect of Business Regulations on Nascent and Young Business Entrepreneurship

André van Stel, David Storey and Roy Thurik

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

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. (2002) 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.

Keywords: Business Regulations; Global Entrepreneurship Monitor; Nascent Entrepreneurship; World Bank Doing Business; Young Businesses (search for similar items in EconPapers)
JEL-codes: E32 G18 M M13 O32 (search for similar items in EconPapers)
Date: 2006-09-26
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: The Effect of Business Regulations on Nascent and Young Business Entrepreneurship (2007)
Working Paper: The effect of business regulations on nascent and young business entrepreneurship (2006)
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