Employment Protection Laws, Barriers to Entrepreneurship, Financial Markets and Firm Size

Raquel Fonseca () and Natalia Utrero-González

No WR-454, Working Papers from RAND Corporation

Abstract: This paper provides new evidence on the institutional determinants of firm size. Using a comprehensive longitudinal database of firm characteristics across 29 industrial sectors in 15 OECD countries, the authors study how labor regulations and barriers to entrepreneurship affect industrial organization in the presence of credit market frictions. They show that strict employment protection laws and more barriers to entrepreneurship affect negatively firms in sectors that are dependent on external funds. Their findings show that the interaction between market regulations and financial imperfections help to explain some of the differences in firm structure across countries.

Keywords: institutions; firm size; financial imperfections; labor costs; entrepreneurship costs (search for similar items in EconPapers)
JEL-codes: C33 G2 G32 J2 L10 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2007-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ran:wpaper:wr-454

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