Institutions, Capital Constraints and Entrepreneurial Firm Dynamics: Evidence from Europe

Mihir Desai, Paul Gompers and Josh Lerner

No 10165, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We explore the impact of the institutional environment on the nature of entrepreneurial activity across Europe. Political, legal, and regulatory variables that have been shown to impact capital market development influence entrepreneurial activity in the emerging markets of Europe, but not in the more mature economies of Europe. Greater fairness and greater protection of property rights increase entry rates, reduce exit rates, and lower average firm size. Additionally, these same factors also associated with increased industrial vintage a size-weighted measure of age and reduced skewness in firm-size distributions. The results suggest that capital constraints induced by these institutional factors impact both entry and the ability of firms to transition and grow, particularly in lesser-developed markets.

JEL-codes: G3 L1 (search for similar items in EconPapers)
Date: 2003-12
New Economics Papers: this item is included in nep-cfn, nep-eec, nep-ent and nep-mfd
Note: CF
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (155)

Downloads: (external link)
http://www.nber.org/papers/w10165.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:10165

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w10165

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().